China will seek to expand its economic and diplomatic influence in the South Pacific at a forum this weekend, amid growing concern from the US and its allies over Beijing’s push in the strategically important region.
Vice-Premier Hu Chunhua will lead the Chinese delegation at the third China-Pacific Island Countries Economic Development Cooperation Forum in the Samoan capital Apia, which begins on Sunday. It is expected to be attended by 400 officials and more than 200 businesspeople.
Hu, the former Communist Party chief of China’s manufacturing powerhouse Guangdong who now overseas commercial and agricultural affairs, is expected to deliver a keynote speech at the opening ceremony.
Beijing sees the two-day forum as “timely” and “a good opportunity to deepen mutually beneficial cooperation between China and the Pacific”, a commerce ministry spokesperson told the official Economic Daily newspaper.
Trade, agriculture and fisheries, as well as tourism, infrastructure and climate change were at the top of the agenda for the forum, the spokesperson said.
Leaders of all the Pacific nations – except the four that do not have formal diplomatic ties with Beijing – are expected to attend the forum. Australia, which has “observer status” at the summit, will send Ewen McDonald, deputy secretary of the Department of Foreign Affairs and Trade and the head of its Pacific office.
The forum comes after China hailed a “new breakthrough” in the region following the decision last month by the Solomon Islands and then Kiribati – despite warnings from the US – to cut diplomatic ties with Taipei and switch to Beijing.
They are the latest of Taipei’s allies to be poached by Beijing as it ramps up pressure on the self-ruled island that it sees as a renegade province to be reunited with the mainland, by force if necessary.
Observers said this weekend’s forum was Beijing’s latest effort to regain momentum in the Pacific.
“Having one of China’s top 25 officials visit the region so soon after [Chinese President] Xi Jinping spent close to three days in Papua New Guinea last November is certainly significant,” said Jonathan Pryke, director of the Pacific Islands programme at the Lowy Institute in Sydney, referring to Hu’s position in the 25-member Politburo.
“It shows clearly China’s attempt to recapture momentum after the West, and in particular Australia, have redoubled their efforts in maintaining and building relationships in the Pacific,” he said.
First held in Fiji in 2006, the forum is part of China’s efforts to expand its reach in the resource-rich region.
Back then, premier Wen Jiabao announced 3 billion yuan of concessional loans to Pacific nations and promised to facilitate more trade, medical aid and tourism with the countries. Chinese capital has been pouring into the region – particularly from the mining and fisheries sectors – ever since.
Of note was a 440 million yuan investment, supported by loans from the Export-Import Bank of China, to build a central business centre at Nuku’alofa, the capital of Tonga.
As China’s influence grows, the South Pacific – a region traditionally under US hegemony, and on Australia’s doorstep – has “increasingly become a major power that cannot be neglected” and “an important part of China’s greater strategic landscape”, according to Shi Chunlin, an associate professor at Dalian Maritime University.
Trade has increased between China and the eight Pacific nations that have diplomatic ties with Beijing, rising to a combined US$4.32 billion last year – up 25 per cent from 2017.
China has also become the largest trading partner of new ally the Solomons, the second-largest to Papua New Guinea and Fiji, and the third-largest to Samoa.
China’s direct investment in the region has also jumped, reaching US$4.53 billion last year, a more than fourfold increase from the US$900 million of 2013.
Pryke said Beijing was expected to offer new support and loans to the Pacific nations.
“But the Pacific are much more picky about how they want to engage with all partners than they were a decade ago,” he added.
Returning from a trip to China earlier this month, Solomon Islands Prime Minister Manasseh Sogavare confirmed Beijing would provide a US$74 million grant to build a new stadium for the 2023 Pacific Games in the capital Honiara – something its former ally Taipei had committed to fund.
China Sam Group also reportedly signed an agreement on September 22 to lease the island of Tulagi in the Solomons, the site of a former Japanese naval base. The agreement mentioned the development of a refinery on the island, but critics said it could also potentially be used as a military base.
China is now the second-largest donor in the region, only after Australia, which has viewed Beijing’s financial largesse with suspicion.
Last year, in an apparent effort to counter China’s rising influence in the region, Australian Prime Minister Scott Morrison announced that Pacific countries would be offered up to US$2.18 billion in grants and cheap loans to build infrastructure.
The US, meanwhile, has also been wary of China’s push in the Pacific, amid an escalating geopolitical competition between the world’s two largest economies across many fronts – from trade to tech supremacy and security. The US has long maintained exclusive defence access in the region through its Guam military base and security pacts with the Federated States of Micronesia, the Marshall Islands and Palau.
Derek Grossman, a senior defence analyst with the US-based Rand Corporation, said this year’s forum in Samoa was likely to be higher profile than previous years after Beijing lured away two more diplomatic allies from Taipei.
He said it would be “closely watched in the US for how Beijing continues to leverage sweet economic deals via its Belt and Road Initiative to potentially entice others to switch”.
“The US, along with close friends Australia, Japan and New Zealand, are becoming increasingly concerned over the prospects for China to one day curry enough influence in these small island states to gain port access that could be used for new naval bases,” he said.
The most important issue at the forum, he said, would be “whether the West assesses that China is making further inroads with these states”.
“The likely answer will be that it is, suggesting that the US and its partners will have to compete with China in this region to ensure that it remains ‘free and open’, per the US Indo-Pacific strategy,” he said.