The US$20 million (K70 million) AIIB loan to the Cook Islands was the second to a strained Pacific economy in the last few months, after Fiji secured a US$50 million (K175 million) facility, signalling the arrival of a development bank closely linked to China’s Belt and Road Initiative to the Pacific.

Vanuatu, with a population of 300,000, also announced last week that it had accepted a US$12 million (K40 million) grant from the Chinese government.

While most Pacific island countries have used their natural borders to combat Covid-19 infections, they have faced economic hardship given their reliance on international tourism, a sector that abruptly shut as the pandemic struck.

China’s growing reach in the region is unsettling for the United States and its allies, who have been the dominant powers in the Pacific since World War II.

Despite being small, Pacific states boast strategic ports and air strips and control vast swathes of resource-rich ocean. They also represent a vote in some international forums.

“China is very willing to lend money to any Pacific island nation,” said Fletcher Melvin, president of Cook Islands’ Chamber of Commerce

“As much as Australia and New Zealand have encouraged the islands to look to them first it’s been a lot easier getting money out of China.”