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China in the Pacific: We must do better

China 1JEFFREY WALL
| Online Opinion

BRISBANE - I am increasingly of the view that the plans by a Chinese state owned fishing company to build a port and ‘fisheries factory’ on Daru is part of a strategic plan by China to expand its Pacific presence, and influence.

Of course it is designed to irritate Australia, and undermine our influence in Papua New Guinea something China has most certainly given more focus as our relations with the Peoples Republic of China has deteriorated.

In this contribution I will outline my reasons why I believe China's Pacific strategies are being significantly stepped up – and the Daru project is a part of that – across the Pacific.

We know already that China has a policy of building ports and airports in countries in South East Asia, and Africa, and funding the construction by Chinese loans that in most cases the countries signed up to them can hardly afford to honour.

That does not really worry China, which funds these projects through state owned banks such as Exim. If a country that signed up to a loan cannot repay, then China takes over the facility.

That has already happened with a major port in Sri Lanka which the government defaulted on. China now has a 99 year lease over the port.

This one example, and there are others in Africa, is why China's strategic port and airport plans across the Pacific must cause Australia and its allies, such as New Zealand, Japan and the United States, concern if not alarm.

The Daru project is yet to actually commence construction. But it continues to be actively promoted by the PRC Embassy in Port Moresby.

Meanwhile we know that China some year ago signed one of our close neighbours, Vanuatu, up to a major port project comfortably capable of berthing a large warship. The project, funded by a loan to the Vanuatu Government is operational and, surprise surprise, it is proving to be quite uneconomic.

It is probably only a matter of time before Vanuatu defaults on this loan, or on other loans with the Chinese. If it does, China may take control of the port – located quite close to Australia.

In the recent Samoa elections one of the key issues was the decision by the pro-China government to award a contract for a major port in Samoa to a Chinese company, funded by a PRC loan.

The opposition alliance won the election but at the time of writing the government that has been in power for 40 years had not vacated office. When it does so one of the first decisions of the new government will be to cancel the port project, worth more than $100 million.

What makes this issue even more important is that as with the Vanuatu project, the Chinese proposal is economically unviable. Samoa is a small nation and its main port in the capital was recently totally redeveloped and expanded thanks to a grant provided by Japan's international assistance agency.

China clearly wants to undermine Japan's contribution and building a second port funded by a loan Samoa cannot afford drives its strategy. Almost half of the Samoa government debt is owed to China and it is common knowledge it is struggling to meet repayments of the existing loans the current government signed up to.

When as seems inevitable the FAST Party led by Faime Naomi Mata'afa assumes office Australia and New Zealand will have to be very alert to how China will respond of the new government cancels the port project. China will almost certainly call in other loans it has advanced to Samoa – and there is no way the new government could repay them on its own.

ChinaAustralia, and New Zealand, are going to have to seriously consider coming to Samoa's aid in these circumstances. The loans advanced to Samoa by China total around $500 million.

Because of Samoa's strategic location, and the significant Samoan communities in Australia and New Zealand, helping Samoa prevent China taking over assets is justifiable. And it would send a clear message to China – debt trap diplomacy can be defeated!

In recent weeks an even more suspicious PRC "infrastructure project" in the Pacific has emerged – and this one ought to alarm the United States even more than it should alarm Australia.

The Republic of Kiribati is a vast in terms of area but small in terms of population nation in the Central Pacific. Australia has enjoyed good relations with Kiribati and the federal budget contains direct Australian assistance in 2021-22 worth $40 million. For a country with a population of around 120,000 that is not an insignificant amount.

Some years ago Kiribati shifted its alliance from Taiwan to the Peoples Republic of China. The President of Kiribati visited Beijing and was fated personally by President Ji.

One of the dozens of islands in the Kiribati group is Kanton. It has a population of just 20! It makes no real economic contribution to Kiribati.

It has recently been reported that as part of its relationship with Kiribati, China is proposing the upgrade of a wartime airstrip on Kanton built by the Americans during World War Two. It has hardly been used since the war, and certainly not commercially.

Why would China want to upgrade an airstrip that is economically unviable, remote and largely disused?

There can be no doubt about the answer – in any dispute, or worse, with the United States or Australia the airstrip would give China a significant strategic advantage, just as the port in Vanuatu would and the proposed ports in Daru and Samoa would.

It remains to be seen how the very pro-Beijing President of Kiribati would respond to such a proposal. But what is clear is that in just three years the small Pacific nation has succumbed to the heavy influence of Beijing. So such a highly suspicious project not only can't be ruled out it is highly likely to be approved if Beijing pursues it.

How can Australia respond to the strategic steps China is taking in our direct region of concern?

The answer is simple – we have to do a lot better than we have done so far!

Here is a summary of our development assistance for 2021-22 to our immediate region:

  • Papua New Guinea gets the lions share worth $587 million but its population of 8-9 million far exceeds the combined population of all the island nations of our region.
  • Samoa is allocate $40 million.
  • The Solomon Islands $156 million.
  • Fiji $81 million.
  • Kiribati $40 million.
  • Tonga $35 million.

For the small island nations these are not insignificant amounts. They far exceed what other developed countries contribute including China which gives very few grants conveniently relying on loans regardless of the capacity of the recipients to repay them.

The Australian government has to urgently determine how it can lead the response to China's growing influence, some would argue stranglehold, in our region. That response must include the United States, New Zealand, Japan and even Taiwan.

We need to encourage our allies to focus on China's real strategic objectives if they have not done so already. That includes being prepared to help out island nations wishing to get rid of the China debt burden they have unwisely signed up to in recent years.

And it also requires all nations to look at real economic assistance to the region which is struggling because of the Covid-19 virus impact on health services, communities and trade and tourism.

There is little point in statements expressing "concern". That has been the general DFAT practice. It is just not good enough.

The Peoples Republic of China has a clear strategy. It builds uneconomic infrastructure, such as ports and airports, in the knowledge it can just take them over if the counties it cajoles into signing up to loans to fund them default – as most in our region are on the brink of doing.

If we want to secure the stability of our region – and our own national strategic influence – then we are going to have to provide real leadership and back it with greater and much better targeted funding.

In all the countries I have referred to as being part of China's strategic plan there is one common factor – the overwhelming dominance of the Christian Churches. Surely, our recent modest provision of funding for church health services in PNG needs to be replicated across the region?

The Covid-19 epidemic has not slowed China's efforts at expanding its influence in our region. If anything while we have been focusing on helping our region meet the enormous challenges the epidemic presents China has been stepping up highly dubious infrastructure and communications projects all funded by loans from the Exim Bank and other PRC financial institutions.

But there is clearly a wider strategic aspect to China's expansionary plans. It simply involves putting China in the best possible position to control, or have the potential to control, key ports and airports in the event of confrontation or worse with Australia, the United States and our allies.

Time to slow progress on this alarming strategy is running out. That is why events in Samoa this week need to be watched closely, and if the elected government does take office Australia and New Zealand need to be prepared to give it substantial assistance to respond to the inevitable retribution that will come from China.

And as I have repeatedly urged we need to address the Daru and Western Province challenges.

If we don't do so then the China port and fisheries industry proposal, however unviable it undoubtedly is then it will happen. And that will be to our significant strategic detriment.

The four examples of China's strategic plan I have outlined just cannot be dismissed. To it needs to be added China's rapid expansion of its communications presence in PNG and some island nations as well as debt laden projects in power supply and road construction.

If Australia does not provide strong leadership no one else will.

Time is really running out for us to do so.

Comments

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BJ Gough

I agree with Mr Wall about the Daru problem.

China poses a “significant strategic detriment” to Australia and PNG. If and when the Chinese fish processing factory goes ahead (unviable) at Daru in Western Province, approaching Daru from the West is most unlikely as that places their armed vessels in Qld waters West of Boigu Isl as it does to Saibai Isl.

China’s eastern approach to Daru brings them to Lat 9.5 degrees - Lon144 degrees called Bramble Cay in the Gulf of Papua which is in Qld waters.

These armed Militia trawlers are loaded with high tech hydrology and surveillance equipment and sail in wolf packs.

In March over 100 such vessel breached Philippine waters in South China sea without asking for authority.

That fleet is presently distributed throughout the territorial waters of Taiwan, Vietnam and the Philippines and supported by Chinese supply vessels.

These wolf packs can be in the Gulf of Papua in very short sailing time.

Stephen Charteris

The alarm bells have been ringing for some time. Only the wilfully blind could fail to see what is happening.

The insidious, creeping, corrosive influence on governance and Pacific values with long-term ramifications.

The vision of a peaceful, prosperous, independent family of nations across the Pacific is not looking so good.

And it does appear that the big Kahuna is asleep at the wheel.

Chips Mackellar

While the expansion of Chinese influence into Vanuatu, Samoa and Kiribati is of increasing concern to us, it is nothing compared to the mischief which will happen when the Chinese move in to Daru.

This is because Daru (together with its mud and mangrove neighbour Bristow) is the only island in the Torres Strait which is part of PNG. All the other islands are part of Australia.

Thus any so called Chinese Torres Strait "fishing" project based in Daru is bound to trespass into Australian waters, or God forbid, also onto nearby Australian islands.

What if the Chinese were to spread a bit of "goodwill" on Darnley Island, or Mer, or establish a "temporary" base on Rennel or Masig or Poruma? Would anyone be there to stop them?

What if the "goodwill" was so good that the islanders wanted the Chinese to stay? These islands are part of Queensland.

Are we prepared for the Chinese expansion in the Pacific to also expand into Queensland, because if we do nothing now, this could easily happen.

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