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Samoa was among the largest beneficiaries of Chinese largesse between 2006 and 2013. Photograph: Newspix/Rex Features
Samoa was among the largest beneficiaries of Chinese largesse between 2006 and 2013. Photograph: Newspix/Rex Features

China increases its aid contribution to Pacific Island nations

This article is more than 9 years old

Lowy Institute figures reveal the Asian powerhouse’s growing influence in the Pacific, with China set to become the third largest donor in the region

Chinese aid to the Pacific has exceeded $1.9bn in the past decade, according to new research that reveals the Asian powerhouse’s growing footprint in Australia’s neighbourhood.

Papua New Guinea, Fiji, Samoa and Vanuatu were among the largest beneficiaries of Chinese largesse between 2006 and 2013, which was spent on 167 projects across the region, Lowy Institute figures published on Monday show.

Though Australia remains the region’s largest provider of development money to the region – contributing roughly six times more than China – assistance to every Pacific country other than Papua New Guinea and Nauru has fallen sharply under the Abbott government.

Chinese aid to Fiji in the seven years to 2013 actually exceeded Australia’s contribution by more than $110m. The Cook Islands, too, received $28m more from China than Australia over the period.

The United States (the second highest contributor), Japan (third) and New Zealand (fourth) outspent China in the region on total numbers, but Lowy Institute researcher Dr Philippa Brant said it was likely China would soon become the third largest donor in the region.

China does not publish official figures about its aid programs, but Brant was able to assemble the data from more than 500 sources, including Chinese-language tender documents, interviews, site visits and Pacific nation budgets.

She said it was important not to overstate the strategic consequences of Chinese money pouring into the region. “[The Pacific] isn’t strategically important to China, it isn’t high-priority. It reflects the broader growth of its aid program.

“Australia still dominates in terms of the amount of aid, so I don’t think we’re seeing any kind of challenge to Australia’s role in the region, and I don’t think the Australian government should have any concerns,” she said. “But China is having a large impact within Pacific Island communities and that’s something Australia and New Zealand need to consider.”

The aid was mostly extended in the form of concessional loans, and went towards disaster relief and projects such as new dormitories at the University of Goroka in Papua New Guinea and the four primary schools in Gautavai, Samoa.

Brant said it was difficult to link the aid to specific political objectives. China and Taiwan once competed to outspend each other in the region in order to secure diplomatic recognition, but have ceased doing since 2008 as their relations have improved.

Mostly the increased spending was about “cultivating an image of China as a responsible player and as a generous nation that is there to help out Pacific Island countries,” she said.

Australia’s foreign aid budget was revised last January and again in the May budget for a total cut of around $7.6bn. Assistance to Papua New Guinea increased by $50m and Nauru’s allocation also increased marginally, but programs in the Solomon Islands, Vanuatu, Samoa, Fiji, Tonga and Kiribati all suffered cutbacks.

Foreign aid was slashed again by $3.7bn in the mid-year economic and fiscal outlook budget in December to fund new national security measures.

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