I have for some time been relatively sanguine about the rise of China in the Pacific. I believed that, like most powers which engage with Pacific Island countries, China wanted a stable and prosperous Pacific region. Chinese trade, aid and investment in the Pacific were good if they created wealth and improved infrastructure. China's truce with Taiwan over the race for diplomatic recognition in the Pacific offered an opportunity for China to mature as a donor.
It is also vital for the Pacific to have access to a greater range of advice than that provided by Australia and New Zealand, and to have advice from other developing countries. China provides an alternative development model that offers some useful lessons for decision-makers in Pacific Islands.
But I am no longer convinced that China is a force for good in the Pacific:
- Chinese infrastructure aid does not usually use local suppliers or employ many local citizens, thus constraining opportunities and creating seeds for anti-Chinese sentiment which has, in a number of countries, already resulted in racially-motivated violence.
- Pacific Island nations are experiencing or will experience difficulties repaying Chinese loans, resulting in higher debt-to-GDP ratios and downgrading their credit ratings.
- China has shown little interest in aid coordination and its methods of aid delivery could undermine the efforts of other donors in some Pacific countries.
- The Fiji Government has invoked the Chinese model of development as justification for censoring the media and ruling by decree. This interpretation of the China model, particularly if replicated by other Pacific Island countries, has the potential to wind back progress across the region in governance and transparency.
- China's inability to curb illegal Chinese immigration in Papua New Guinea and elsewhere, or to encourage Chinese companies to improve their relations with local communities or address Chinese organised crime, is likely to create more local resentment.
- The rapid increase in China-Pacific Islands trade means that the two major trading partners (Australia and China) of most Pacific Island countries are strategic competitors, posing some potentially difficult choices for countries which benefit from the security umbrella provided by Australia.
- China's desire to project a global presence through its economic might, diplomacy and its ability to project power into the 'second island chain' raises the possibility that it will come into conflict with US, French, Australian and New Zealand military interests in the Pacific.
