Chinese Aid in the South Pacific: Linked to Resources?

Abstract

China's emergence as a global development actor has implications for developing countries and "traditional" donor agencies. Its current provision of foreign aid and other forms of development assistance to developing countries throughout the world presents both opportunities and challenges for all actors. At the same time, China's growing need for natural resources and its policy of securing access through state-led "resource diplomacy" are causing concern. While most scholars and commentators are focused on the "China in Africa" dimension, China's engagement in the South Pacific region has also been growing rapidly over the past decade and offers some interesting and unique insights. This article examines the dynamics of China's provision of foreign aid and its quest for natural resources in the South Pacific region, with comparative references to other regions. Drawing particularly upon interviews and site visits in Fiji and Papua New Guinea, it argues that although major commercial resource contracts do appear to be supported by Chinese Government assistance, resources deals are not explicitly part of Chinese foreign aid in the region.

Chinese Assistance in the Pacific: Agency, Effectiveness and the Role ofPacificIsland Governments

“…A large component of this Chinese assistance was the 2006 ‘soft loan facility'—an RMB 3 billion regional funding facility negotiated and disbursed bilaterally. Many of these loans took a number of years to be implemented (Brant ). More recently in November 2013, a new regional assistance package was announced at the 2nd China‐Pacific Islands Countries Forum in Guangzhou.…”

Self-determinable Development of Small Islands

“…Rather, it finds that it is more common for the companies to negotiate access with local actors before "bringing the state with them" to provide grants and interest-free or concessionary loans and move the project forward (Brant 2013b). Especially since Beijing's "going out" strategy was implemented in the mid-1990s, Chinese companies have significant incentives to invest abroad and seem to be exercising an increasing degree of independence from state control.…”

Looking north or looking anywhere? Indo-Fijian international relations after the coups of May 2000 and December 2006

“…Small PICs need cooperation of bigger countries and able investors to benefit from these resources. Fiji authorities are eager to find investors in the mining sector and hope to make mining the country's number one export earner (Brant 2013). Also PNG has considerable fossil fuel resources, which are exploited since a few years, mainly exported to Japan, China and South Korea.…”