While Australia has long been the dominant provider of foreign aid in the region, Beijing has led the way in providing cheap loans to bankroll infrastructure projects. China was responsible for 37 per cent of all donor loans to the Pacific between 2011 and 2017, funding projects with a total value of about $US1.7 billion.
The Australian government has been concerned for a number of years that some countries in the Pacific are becomingJonathan Pryke, director of the Lowy Institute’s Pacific Islands program, said he believed the Australian government underestimated how difficult it would be to find projects that were economically viable. He said it was easier for China to fund projects as they were often done more cheaply and in some cases left countries in debt.
“In the soft loan space, China is the dominant bilateral lender. Beijing is building roads and ports in Vanuatu, ports in PNG, government buildings in Port Moresby, schools in Samoa – they’re all over the place.” “Chinese loans have also largely served their purpose of getting Chinese state-owned enterprises into the Pacific. They’re in the market, they’re winning government contracts from the local governments, the Asia Development Bank and others,” he said.Mr Pryke said it was important not to spend all of money in the AIFFP at once because Australia needed to compete with moves made by other players on a case-by-case basis.
Gallo_Ways This is a far-sighted and highly appropriate policy.
Gallo_Ways Great news. Get China out