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China’s Pacific aid mostly goes to its allies, Australian think tank says
- Chinese overall economic influence among the 14 aid-dependent island nations in the region is losing ground, the Lowy Institute reported on Tuesday
- The United States has been seeking to counter Chinese influence in the region with additional diplomatic and economic engagement
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China’s declining aid to the South Pacific is increasingly targeted towards its political allies in the region as appetite there for Chinese credit declines and competition grows with the US for influence, an independent Australian think tank reported on Tuesday.
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Chinese overall economic influence among the 14 aid-dependent island nations in the region is losing ground because of better loan deals being offered by US allies, especially Australia, the Sydney-based Lowy Institute said in its annual analysis of aid to the region.
Focus on the strategic competition in the South Pacific has heightened since China struck a security pact with the Solomon Islands last year that raised the prospect of a Chinese naval foothold in the region.
China has increased aid to the Solomons and neighbouring Kiribati since they switched diplomatic allegiances to Beijing from self-ruled Taiwan in 2019, the report said.
The United States has sought to counter Chinese influence in the region with additional diplomatic and economic engagement. US President Joe Biden recently hosted Pacific island leaders at the White House.
China’s overall aid to the island states in 2021 – the latest year for which the international policy think tank has comprehensive data – was US$241 million. The year continued a downward trend in Chinese grants and loans to some of the world’s most aid-dependent countries since China’s US$384 million peak in 2016, the institute reported.
The latest report revises previous Chinese annual contributions based on additional data but maintains the downward trend.
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