Drop in China aid
WELLINGTON, (RNZ PACIFIC) China seems set to change the way it relates to Pacific nations.
This much is evident from a study showing a dramatic fall in aid spending, in terms of grants and low cost loans, over the past several years.
An assessment by the Australian think tank, the Lowy Institute, using its Pacific Aid Map, showed that, while various Western nations were raising concerns about Chinese influence in the Pacific, Beijing was cutting back its involvement.
Lowy said Chinese aid, in the form of grants and low interest loans, peaked in 2016, at $US287 million ($F603m).
Lowy’s Pacific program director, Jonathan Pryke, said by 2019 that aid was down to $US169m ($F355m) — its lowest level in seven years, “total aid in 2019 was about $US2.44 billion ($F5.12b), so they (China) are by no means a bit player, but they were certainly not the dominant force that many people believe, and yes, the story is very much one of decline, as you noticed”.
The institute also found that China was being “less generous”, with a greater proportion of that reduced aid coming in the form of concessional loans rather than grants.
Within this period two Pacific nations, Kiribati and Solomon Islands transferred their allegiance from Taiwan to China.
In addition both New Zealand and Australia launched Pacific reset campaigns with the apparent aim of the perceived rise in Chinese influence.
There is no immediate explanation for why China has done this. Mr Pryke suggested it may be a sign the aid had served its purpose.
He said the low cost lending, in particular, had been used as a vehicle to get Chinese business enterprises into the Pacific.
“And these organisations have put down deep roots in the Pacific now and are no longer reliant on Chinese aid to engage in commercial activity, prosecute China’s interests. You know, no one in the Pacific will tell that in 2020 or 2021 that China’s presence felt less impactful or less significant, but it is just that aid was less of a driver for it than it has been in the past,” he said.