CANBERRA – China gave significantly less aid to Pacific island nations in recent years despite Beijing’s diplomatic efforts to increase its influence in the region, according to a Sydney-based think tank.
Chinese aid to the Pacific shrank by 31% in 2019 to $169 million, the Lowy Institute said in its annual Pacific Aid Map released Wednesday.
Only the World Bank pulled back more that year, but that had been expected after aid tripled between 2017 and 2018 through an extraordinary burst of investment, said Jonathan Pryke, Pacific Islands program director at the international policy think tank.
“There has been a consistent level of growing engagement from China in previous years and we’ve seen this sharp decline in 2019 which is against the narrative,” Pryke said.
The map is a data base covering 66 donors and tens of thousands of aid projects in 14 Pacific island sovereign nations, which exclude the French territories of New Caledonia and French Polynesia.
Data since 2019 including the impact of the pandemic are incomplete and are not included in the latest report.
Pryke said preliminary data since 2019 suggested that China’s lowest contribution to the Pacific region since 2012 was not an anomaly.
“We’ve done some cursory analysis of 2020 on China as well and we haven’t seen a bounce back,” Pryke said.
International aid to the Pacific dropped by 15% in 2019 to $2.44 billion. The Lowy Institute expects data will show contributions rose last year in response to the pandemic.
It is not clear why China pulled back from the Pacific since its aid to the region peaked at $287 million in 2016.
Chinese President Xi Jinping made a state visit to Papua New Guinea in late 2018 ahead of an Asia Pacific Economic Cooperation leaders’ summit hosted by one of the most populous South Pacific island nations.
Two Pacific island nations, Kiribati and Solomon Islands, switched their diplomatic allegiances from Taiwan to Beijing in 2019 in a major regional win for the Chinese Communist Party.
The Pacific’s traditional aid partners, the United States, Japan, Australia and New Zealand, have stepped up efforts to offer alternatives to China’s Belt and Road Initiative infrastructure partnerships.
Pryke suspects Pacific nations now have more aid options and are seeking better deals than China offers.
“They’ve become a bit more savvy about what they’re borrowing for because a lot of these projects from China haven’t panned out as they expected,” Pryke said.
“It could well be that China’s just not as engaged, they’re focused elsewhere. They’ve certainly been tightening the purse globally,” he added.
The Chinese have also become less generous with the sums of aid they offer the Pacific.
In 2018, 59% of the Chinese aid was offered as grants and the remainder was concessional loans.
In 2019, 67% of the Chinese aid was loans, according to the Lowy Institute.