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First Asia, Now South Pacific: China Expands Economic Footprint in Traditional Western Stronghold

FILE - Men work on unloading the rubber imported from Belt and Road Initiative (BRI) countries at a bonded logistics center in Nantong, Jiangsu province, China, May 17, 2019.
FILE - Men work on unloading the rubber imported from Belt and Road Initiative (BRI) countries at a bonded logistics center in Nantong, Jiangsu province, China, May 17, 2019.

Taiwan, a Western ally, lost two diplomatic allies in the South Pacific last week, China is expected to offer economic them development aid

China’s likely acquisition of two new diplomatic allies in the South Pacific advances its growing global economic effort – warily watched by the West – to offer infrastructure aid to other countries in return for natural resources.

Kiribati and the Solomon Islands both broke diplomatic ties with Taiwan last week on their way to recognizing instead Taiwan’s political rival China. China will probably pump development aid into the two tiny archipelagic nations to help their infrastructure and expect in return access to fisheries and possible undersea fossil fuels, analysts and government officials say.

China is doing the same in much of Asia already, a program it calls the Belt and Road Initiative.

The South Pacific, a series of archipelagos far from the world’s major population centers, needs an outside source of infrastructure for economic development. Western ally Australia has traditionally helped but due to its small size can’t offer what China can, said Stephen Nagy, senior associate politics and international studies professor at International Christian University in Tokyo.

“There’s a Pacific Belt and Road initiative and the idea is you provide some infrastructure and connectivity projects to different countries, and that’s a way to bring them into your economic sphere of influence,” Nagy said.

China in turn gets more access to some of the world’s best fisheries and possible reserves of oil or gas, he said. The western and central Pacific produce more than half the world’s tuna.

Global Belt and Road

China started its primary Belt and Road initiative in 2013 around Eurasia. It helps often less developed countries with loans and labor to build ports, airports and roads. In return for the roughly $1 trillion invested there to date, China expects to open new trade routes and give its companies, constrained at home, new markets.

Beijing officials hope to “brand” the Belt and Road as a global initiative by extending it to the South Pacific, business consultancy Dezan Shira & Associates says.

The Pacific faces “some of the most difficult development conditions in the world and has huge financing needs, especially due to the effects of climate change,” the Lowy Institute for International Policy in Australia said in an article published last year.

Australia kicked off in July an infrastructure financing mechanism that will give Pacific nations about $1 billion in loans and $340 million in grants.

Australia, New Zealand and Japan – which is also seeking stronger world influence –hope to resist China’s political influence and natural resource access, Nagy said. Australia and the United States should “seek enhanced coordination” and “commit robust aid packages” as countermeasures, said Fabrizio Bozzato, a Taiwan Strategy Research Association fellow who specializes in the Pacific.

Cases of Kiribati, Solomon Islands

In Kiribati, a nation of just 116,000 people and at risk of losing land mass to rising sea levels, China had been talking to President Taneti Mamau and members of his party since at least 2016 about development aid, Taiwan Foreign Minister Joseph Wu said.

“Recently, the Chinese government has taken advantage of fisheries and other commercial investments to establish a presence in Kiribati, penetrating political circles and extending its influence,” Wu told a news conference Friday in Taipei.

The prime minister of the Solomon Islands said his country dropped Taiwan for China earlier in the week to “engage at the international level with development partners capable of advancing our national interests.”

About one in eight of Solomon citizens lives below the national poverty line, the Asian Development Bank says. The group of 300 islands with a 611,000 population faced with a shortage of jobs aims to build a food processing industrial plant among other upgrades.

China’s larger budget and lack of a democratic approval process usually make it easier to give more development aid than Taiwan can offer.

Political mileage

China may see increased influence over the South Pacific as a way not only to squelch Taiwan but also to resist the U.S.-led Indo Pacific strategy – part of which means bringing Western allies together to contain China’s maritime expansion in Asia.

China claims sovereignty over self-ruled Taiwan and asks that other countries avoid diplomatic relations with it. Beijing has not dropped the threat of force, if needed, to bring Taiwan under its flag.

“You could of course explain this as something that’s good for China’s interests but you definitely can’t rule out that it’s a so-called counter strategy to the U.S. Indo-Pacific strategy,” said Huang Kwei-bo, vice dean of the international affairs college at National Chengchi University in Taipei.