ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
International relations

Australia and New Zealand chip away at China's Pacific influence

Island nations worry about their swelling debt to China as forum begins

SYDNEY -- As China attempts to increase its influence over Pacific countries by increasing development assistance, Australia, the traditional supporter of the small island nations, is growing wary.

During a Pacific Islands Forum meeting that kicked off Monday on Nauru, a tiny island in the Central Pacific, Australia and New Zealand are expected to sign a joint statement on security with PIF countries. Australia and New Zealand also aim to solidify their influence over the region by dispatching high commissioners and by taking other measures.

Speaking to reporters during a visit to Jakarta, Australian Prime Minister Scott Morrison said his country has a "special responsibility in the region" and compared Australia's relationship with the countries to that of family members.

Morrison made the statement apparently with China in mind. China is increasing its political muscle in the region with ample amounts of funding. Chinese President Xi Jinping is expected to meet with Pacific country leaders in November, when an Asia-Pacific Economic Cooperation forum takes place in Papua New Guinea. China may use the occasion to further expand its development assistance in the region.

At a PIF summit scheduled for Wednesday -- where participants will discuss issues related to security, humanitarian assistance and control of illegal fishing -- Australia and New Zealand are expected to seek to expand a security framework adopted in 2000.

Australia is expected to name its first high commissioner to Tuvalu, Reuters reported on Aug. 29, quoting an anonymous government source.

China's financial assistance to the Pacific nations exceeded $1.2 billion from 2011 through 2018, according to the Lowy Institute, an Australian think tank. Much of the aid took the form of loans, and the debt is becoming burdensome for the small Pacific economies.

Samiuela 'Akilisi Pohiva, prime minister of Tonga, told reporters while visiting Samoa in August that all Pacific island nations should sign a joint petition asking Beijing to write-off their loans. He also called for the matter to be discussed at the PIF summit.

The prime minister later retracted the statements, but awareness of the burden had already grown. In 2017, the leader said that in a few years China could be in a position to take over the running of Tonga.

Tonga's foreign debt hovers at over 40% of its gross domestic product, according to the International Monetary Fund. Repeated cyclones have left the government's finances tattered, and the country remains unsure how it can repay its accumulated loans. Other Pacific island nations have heavy debt-to-GDP ratios as well. Samoa's is 50%, and Vanuatu's is 37%.

No one "should make those island countries carry unnecessary burdens," and aid should be "responsible," a former cabinet minister of Australia said, not referring to but indirectly criticizing Beijing.

Australia has partnered with the U.S. and Japan to work on an Indo-Pacific strategy. Pacific nations are part of the region, and Australia does not want China to gain influence.

In July, New Zealand issued a defense report that addressed China's increasing sway in the region. "Traditional partners such as New Zealand and Australia will be challenged to maintain influence" on the Pacific nations, the report says.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media