Dragon in paradise: China's rising star in Oceania

National Interest, The, Summer, 2003 by John Henderson, Benjamin Reilly

Aid from China is generally given for political rather than economic purposes. Indeed, much of the assistance to date has been for highly visible prestige projects, including the construction of a new parliamentary complex in Vanuatu, a multistory government office in Samoa, the new foreign ministry headquarters in Papua New Guinea, as well as hotel developments in Tonga and the provision of a ferry for Kiribati. China also built the sports stadium in Fiji for the 2003 South Pacific games, and has made a practice of donating a fleet of VIP cars to the island state hosting the annual Forum meeting. These projects have added little or nothing to the recipients' economic development, however, because China provides all the materials and labor for the construction of aid projects.

Meanwhile, since the end of the Cold War, Western aid donors have increasingly attached governance conditions of accountability, transparency, human rights and democracy to aid arrangements. When democracy is overthrown by a coup, as happened in Fiji and the Solomon Islands, the curtailment of Western aid disbursements has created resentment. By contrast, China has been widely praised for its policy of "noninterference", which contrasts sharply, as the locals see it, to the "bullying" tactics of Australia and New Zealand.

An interesting window on the "governance - and - aid" issue is Tonga's 1998 decision to switch diplomatic recognition from Taiwan to China. Tonga is ruled by a feudal political system with King Tupou TV holding near-absolute powers. Several reasons have been advanced as to why the king decided to recognize China. He may have wished to assist his daughter Princess Pilolevu's profitable satellite company, which had developed strong ties with China (this despite the multi-millionaire Princess's claim that she was moved not by money but by a desire to spread Christianity). The king was perhaps impressed by the larger-than-life bronze statue of himself presented by Beijing. Recognizing China also cleared the way for Tonga's entry to the UN. But most important, the king--who has resisted Tonga's pro-democracy movement--was "unimpressed" by Taiwan's adoption of democracy. As he sees it, governance is his business--in both senses of the word.

While China's interests in Oceania are mainly political and strategic, there is also an important economic dimension. China is an increasingly important trading partner for Pacific island states, with the trade balance heavily in China's favor. Over 3,000 Chinese state and private entities have established themselves in the region, with investment worth some $800 million. China has also agreed to fund the establishment of a Pacific Trade Office in Beijing to promote trade and investment between China and Pacific island states, with proposals for another trade post in Hong Kong.

Within Oceania, only Melanesia contains extensive mineral and forestry resources, but political instability has hindered any significant development of them. Micronesia and Polynesia have little to offer investors beyond fish and tourism, although sea-bed minerals remain a possible future source of potential wealth given the vastness of the island states maritime exclusive economic zones. China has carried out extensive oceanographic research, including the analysis of the region's seabed minerals. Along with Taiwan, China has extensive interests in Oceani's fishing resources, so much so that in September 2001 New Zealand expressed concern about a one hundred-strong Chinese fishing fleet establishing a base in Fiji. Observers feared that the fleet might undermine recently agreed conventions on highly migratory fish species, especially tuna. A Chinese spokesman denied that China was establishing a new base, maintaining that Fiji had invited the fleet to help develop its own fishing infrastructure. This, too, w as disingenuous.