SYDNEY—China is using “pay-day loan diplomacy” to exert influence in the Pacific, the new U.S. ambassador to Australia said on March 13, comments that threaten to inflame regional tensions.
The United States and its regional allies have been battling China for greater influence in the Pacific—a region that has votes at international forums like the United Nations and controls vast swathes of a resource-rich ocean.
The geopolitical competition has seen both sides increase foreign aid to the region in recent months, which the West says is needed to prevent the Pacific falling into financial distress and becoming susceptible to diplomatic pressure from Beijing.
New U.S. Ambassador to Australia Arthur Culvahouse said Pence’s criticism was not strong enough.
“I would use stronger language—I would use payday loan diplomacy,” Culvahouse told reporters in Canberra after presenting his diplomatic credentials to Australia’s Governor-General.
“The money looks attractive and easy upfront, but you better read the fine print,” he said.
Lenders of pay-day loans typically charge a higher interest rate.
The arrival of Culvahouse, the first U.S. ambassador to Australia in more than two years, comes at time of bilateral tensions between Canberra and Beijing.
Analysts believe Beijing may now be using trade to punish Canberra for its criticism.
Sources at Chinese ports told Reuters last month that Australian coal imports are facing longer waiting times to clear customs than other supplies, and the northern port of Dalian was halting Australian coal shipments.
