Australia pays Chinese company for Nauru’s new port

Amid intensifying competition in the region, Australia is bankrolling a Chinese government-backed construction company with a chequered history to build Nauru’s new port. In January, the Chinese Communist Party’s news organ had happy news for the Pacific island nation of Nauru following its decision to align with Beijing and ditch its diplomatic recognition of Taiwan.

The Global Times pointed to the work of a Beijing-controlled company behind an AU$80 million (FJ$119.19 million) port project in Nauru, China Harbour Engineering Company, and quoted a senior official hinting that China’s largesse could extend beyond trade and investment to security.

Beijing would not “set restrictions for fields of our co-operation”, a Chinese Foreign Ministry spokesperson told the Global Times when asked if Nauru might sign a policing deal with China.

The Aiwo port overhaul is just one of China Harbour’s key infrastructure projects across the South Pacific and elsewhere in the developing world.

Something that sets it apart from others is that a good chunk of its funding – AU$20.7 million (FJ$30.84 million) out of the redevelopment’s total budget of AU$80 million (FJ$119.191 million), according to Nauruan budget papers – was provided by Australia via the multilateral Asian Development Bank (ADB), which is co-ordinating the wharf rebuild and which oversaw the selection of China Harbour as lead contractor.

The revelation raises questions about why Australia is bankrolling a project that, while aiding an impoverished neighbour in Nauru, may be advancing China’s regional interests.