Chinese influence ‘overstated’

CANBERRA: Australia is still the biggest donor to developing Pacific nations but China is catching up fast.

Australian thinktank the Lowy Institute’s Pacific aid maps show eight years of foreign aid given to island nations.

The data shows Australia and New Zealand have pumped the vast majority of money into the region — totalling $US7.79 billion since 2011 — making up 55% of all aid to the Pacific.

China pales in comparison, putting in $US1.26 billion or 8% of total aid since 2011.

There are longheld concerns China is ‘‘on the march’’ in the region by bankrolling projects including ports, roads and loans to small island nations.

However, the institute said yesterday the narrative of Chinese aid dominance in the Pacific Islands was ‘‘overstated’’.

‘‘China does operate distinctly, focusing on status projects and infrastructure lending that inflate its presence in the region.

‘‘The average project size from Australia and New Zealand is one tenth that of China,’’ the institute said.

Much of the political rhetoric around aid to the region is that China is dominant and trying to buy influence.

But New Zealand’s Green Party global affairs spokeswoman Golriz Ghahraman said much of that rhetoric was driven by xenophobia.

‘‘Well it’s a bit like all that talk of Chinesesounding names in terms of the investment in homes in New Zealand, whereas we found out it was such a tiny number of foreign investors and in fact we need to curtail speculative investment altogether — so it is xenophobia unfortunately.’’

Terence Wood is a research fellow with the Development Policy Centre at Australian National University.

He said another factor was that China was a relatively new player in terms of giving aid to the region.

‘‘The other thing that sometimes people, to place an increased emphasis on China’s giving, is that some of the aid that China gives to the Pacific is given as loans whereas Australia and New Zealand tend to give almost all of our aid to the region as grants, so loans come with an additional layer of complexity insomuch as countries become indebted.’’

New Zealand Foreign Affairs Minister Winston Peters said the risk for many Pacific nations was that they simply could not afford to take on the loans.

‘‘There are some economies, for example, that have got well above 45% of debt. Now 45% of debt is not high internationally, I mean Germany is much higher, but here’s the rub, they can’t pay it back — Germany can.’’

The Lowy Institute data shows that since 2011, China has provided $853 million in loans to the region, but that was less than the amount that the World Bank and Asian Development Bank have provided in loans — which totals just over a billion dollars.

Peters said some of the Chinese money was not being well spent.

‘‘There are a number of projects which don’t stand investigation, the quality of them has been seriously inferior and we have raised that, for example, with the Chinese Government.

‘‘If you are going to do work to do with infrastructure, it has to be of first world standards, it cannot be inferior, you can’t have the concrete cracking and splitting after 10 years and I’ve seen that in the islands.’’

The Lowy Institute collected data on close to 13,000 projects in 14 countries from 2011 onwards. — AAP/RNZ