Australian Prime Minister Malcolm Turnbull yesterday said he supports Chinese foreign investment in impoverished Pacific Island nations so long as it is productive, amid concerns that Beijing is buying increased influence in the region.
“We welcome this investment from any source, any nation, any development bank, on the basis that it is going to provide real value, supports good governance, has got a robust business plan and so forth,” Turnbull told reporters in Sydney after talks with New Zealand Prime Minister Jacinda Ardern.
Australia is the largest donor of foreign aid to the Pacific, committing A$166.4 million (US$129 million) to the region this year.
Photo: EPA-EFE
However, with a sluggish economy and a large budget deficit, Australia’s economic aid budget could fall to its lowest level, opening a door for China, analysts say.
Meanwhile, Chinese economic aid to the region is growing significantly, according to Australian think-tank the Lowy Institute, with an estimated US$1.78 billion spent in the decade to 2016.
Canberra’s relationship with China soured early this year after Australian Minister for International Development and the Pacific Concetta Fierravanti-Wells said Beijing was constructing “useless buildings” and “roads that do not go anywhere” in the Pacific.
Australia and New Zealand have long enjoyed near unswayed influence in the Pacific, including acting as protectorates over Pacific nations including Papua New Guinea. However, blessed with large natural resources and a desire to source larger allies, China has turned its attention to the region.
The issue of China’s influence in the Pacific was informally put on the agenda of the New Zealand state visit after its Deputy Prime Minister and Minister of Foreign Affairs Winston Peters raised the matter at a speech to the Lowy Institute on Thursday night.
New Zealand would seek to counter China by increasing foreign aid donations to the region, Peters said.
“The Pacific overall has also become an increasingly contested strategic space, no longer neglected by great power ambition, and so Pacific Island leaders have more options. This is creating a degree of strategic anxiety,” Peters said.
Taiwan last month said China had forced Papua New Guinea to change the name of Taipei’s representative office in the nation and remove diplomatic license plates from diplomats’ cars.
New Zealand is the second largest donor to the region, after Australia, providing about NZ$1 billion (US$726.72 million) in aid from 2014 to this year. Peters did not reveal any details of New Zealand’s future aid budget.
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