China spending ‘overstated’
An Australian think-tank says China’s aid dominance in the Pacific has been overstated, but Foreign Minister Winston Peters says the debt burden caused by China is a serious issue.
Together, Australia and New Zealand are responsible for 55 per cent of all aid to the Pacific region, according to a new aid map and data tool created by the Lowy Institute.
But China and Taiwan have been spending more on aid, especially in the form of loans, in recent years. And the countries have made hundreds of millions in future commitments.
Peters launched in March New Zealand’s Pacific reset, which was brought about largely owing to China’s increased spending in the region.
The map, which was launched in Apia, Samoa, on Thursday, was a response to a lack of public information on countries’ aid spending.
Foreign aid was an important resource for Pacific islands, but there was a lack of information, the institute said.
‘‘This reduces the effectiveness of aid, making it difficult to co-ordinate aid efforts, challenging to align aid with Pacific country priorities, and harder for donors to learn from each other and from the past.’’
The map based on data from
2011-2016, shows New Zealand spent a total of US$192.01 million
($285.17m) on aid in the Pacific in
2016, on 346 projects. This data comes as the world turns its attention to China’s expansion plans, largely through its belt and road initiative, and efforts to grow its soft power in the wider Asia-Pacific region. New Zealand has joined the chorus of countries warning against Chinese aid spending, especially in the form of loans, which can place a large debt burden on Pacific countries.
Peters launched the Government’s Pacific reset with a promise to ‘‘shift the dial’’ in the region, in response to increasing competition for influence and resources in the region.
Part of the Pacific reset was a $714.2 million boost to aid and development spending over four years, mainly in the Pacific. This includes a new $180m Strategic International Development Fund, to ‘‘allow New Zealand to be flexible and responsive to the emerging needs of our Pacific partners’’, Peters said. ‘‘New Zealand is a small, realistic and pragmatic country. We know we cannot help the Pacific solve its problems on our own – as there will always be someone with deeper pockets than ours and some Pacific leaders are attracted to easy sources of funding,’’ he said at the time.
Meanwhile, Defence Minister Ron Mark has spoken about the risks to the region posed by the rising super power, largely due to the escalation of tensions over China’s perceived claims in the South China Sea.
Peters, Mark, and Prime Minister Jacinda Ardern have all spoken about the issue of unserviceable debt burdens placed on Pacific countries by China, through aid as loans.