SOUTH PACIFIC: Chinese Relief From Domineering Australia

By IPS Correspondents Reprint | | Print |

Kalinga Seneviratne

SYDNEY , Apr 16 2006 (IPS) - Seeking greater independence in their economic policy-making from an overbearing Australia, Pacific Island Countries (PICs) have lately been rolling out the red carpet for visiting Chinese leaders, officials and businessmen.

This month saw a summit meeting between the leaders of the PIC and China, the highlight of which was the first ever visit of a Chinese premier to the grouping that includes Fiji, PNG, Cook Islands, Federated States of Micronesia, Niue, Samoa and Vanuatu,.

Prime Minister Wen Jiabao spent two days in Fiji which saw the signing of a three billion yuan (374 million US dollars) development assistance package, which included a special fund that would help Chinese companies invest in the region.

For the PICs, particularly Papua News Guinea (PNG), Fiji and Vanuatu, Chinese attention has been a welcome relief from the increasingly neo-colonial attitude of the Australian government towards the PICs in recent years, under Prime Minister John Howard. To wean themselves away from their traditional dependency on Australia (and New Zealand) PICs seem to greatly appreciate Beijing’s desire to open its cheque book and offer expertise to the region.

Speaking at the inauguration of the two-day summit meeting on Apr. 5, the Chinese premier said that his country’s greater involvement in the Pacific region was not one of “diplomatic expediency” but a “strategic decision”.

Fiji’s Prime Minister Laisenia Qarase said the summit reflected the shifting patterns of diplomacy and political alignments in the Pacific. “China defines a new and compelling reality politically and economically,” he noted. ”The message we deliver in this forum is that we aim to be as self reliant as possible. We want to limit or remove completely our dependency on aid and stand on our own two feet, more and more we see our long term future and progress driven by trade.”

The agreement proposes the establishment of a China-PIC ‘Economic Cooperation and Development Guiding Framework’ which will provide impetus for better trade relations.

Already some 3,000 Chinese companies do business in the Pacific, and have invested more than one billion dollars in hotels, plantations, garment factories, fishing and logging operations. Trade between the PICs and China is still limited by the island countries’ small economies and poor transportation links.

Discussions, this month, covered the establishment of a direct air route by a Chinese airline bypassing Australia or New Zealand.

Over the past five years, the two-way trade between China and the PICs has tripled. In 2001, total trade stood at close to 200 million dollars. In the first 8 months of last year, exports from China to the PICwas 357 million dollars and imports 311 million dollars, according to China’s commerce ministry.

A large proportion of the trade is taken up by timber from PNG, Fiji and Solomon Islands, and natural gas from PNG. Black pearl exports from French Polynesia have also become a hot item, while Chinese tourists visiting the islands have steadily increased from 35,000 in 2002 to almost 50,000 last year.

Forestry products comprise 40 percent of China-PIC trade, which was worth 400 million dollars last year and counted products such as wood chips, fibreboard, plywood, furniture and paper products. This was highlighted by China’s forestry director, Jia Zhibang, at the summit meeting, where China offered assistance in reforestation, logging, wood processing and utilisation. The director also said regional forest products will attract zero tariff in China.

China also announced that three more PICs – PNG, Samoa and Federated States of Micronesia would be granted Approved Destination Status, so that Chinese tourists can visit these countries. A delegation consisting of China’s vice-minister for tourism and tour operators has been touring PICs such as Samoa, Micronesia and Tonga, this month, looking at avenues for increasing Chinese tourist flow to the South Pacific and investment opportunities.

Qarase told a post-summit press conference that the PICs are increasingly looking north “for answers for our trade and investments aspirations”. He saw this month’s meeting as paving the way to find new markets “where there is flexibility of entry and a readiness to meet the export needs of small, isolated island countries”.

China is moving into the region at a time when many Pacific Island countries, particularly PNG and Fiji, have been critical of the Australian government’s heavy-handed tactics in the region. Australia is by far the biggest aid ‘donor’ in the region with the annual Australian Overseas Development Assistance (ODA) budget to the Pacific standing at 720 million dollars.

However, a major part of it, in recent years, has been earmarked for “strengthening governance and to reduce corruption” in recipient countries.

Under these ‘aid’ schemes, Australia stations bureaucrats, police officers and financial advisors in strategic departments and law enforcement agencies in the region. In PNG and Fiji this has been greatly resented and seen as an attempt to undermine their sovereignty. In May 2005, a supreme court decision in PNG sent packing 800 Australian police officers deployed in the country under the aid programme.

PNG Prime Minister Michael Somare argued in post-summit comments to the media that China’s attractiveness comes from the fact that it too is a developing country “with similar development challenges although on a far bigger scale”. ”There is much we can learn from one another.”