Beijing is pumping more money into new developments in the Solomon Islands and Kiribati as “COVID-Zero” policies pummel the Chinese economy.
“In both countries, sizeable new financing from China has displaced existing support from Taiwan,” according to the Sydney-based Lowy Institute. “China has not given up on using development assistance to cement key relationships.”
In response, Simon Birmingham, Australia’s opposition foreign affairs spokesman, said the region was an area of concern.
“It’s important to make sure we work as closely as we can to ensure Pacific nations who are wanting to advance their democracies, along with economic development, are empowered to do so,” he told AAP.
“Where undue restrictions are placed on the media, or where a diminution of electoral processes and democratic processes are occurring, of course, Australia should raise those concerns.”
Australia remains by far the largest source of aid to Pacific countries, the Pacific Aid Map shows.
In 2020, Australia provided $1.23 billion (US$780 million) in aid to the Pacific region, far exceeding the $375 million from the United States and $245 million from China.
In 2021, Beijing spent $145 million in the Pacific, compared with Australia’s $1.7 billion.
Alexandre Dayant, director of the Pacific Aid Program, said there was a “supply and demand problem” with CCP aid money.
On the demand side, he noted that leaders of Pacific island countries were “waking up” to the fact that the Chinese aid projects had quality issues and were backed by loans with difficult payment conditions.
Dayant noted, however, that Pacific leaders were getting better at playing the “China card” to try to extract more aid money from developed countries.