Tanishka, Research Intern, ICS
China & Pacific Island Countries
The Asian superpower China, second-largest aid provider to the Pacific Island countries established diplomatic relations with the Solomon Islands in 2019. A country of just over half a million people, a low-income economy with more than three-fourth of its population living in small villages, is among the lesser developed countries of the South Pacific region. The Chinese offers of infrastructure projects, concessional loans along with aid-in-kind and Solomon Island’s rich timber, fish, and potential seabed resources facilitated the connection between the two countries. China’s other motive for establishing diplomatic relationships in the Pacific is limiting Taiwan’s international space. Solomon Islands switched allegiance from Taipei to Beijing, terminating its 36-year-old official relationship with Taiwan. Out of the fourteen Pacific Island states, China now has ten partners.
For the Solomon Islands, the decision to switch allegiance, came from the recommendations of a task-force deployed by Prime Minister Sogavare, which indicated the past action to establish ties with Taiwan, which was economically more active than China back then was bought by money power. The report pointed out that presently Taiwan has a limited economic capacity while China’s investments cover the entire globe; the switch thus, brings a large potential donor to Solomons. The report can be characterized as Idealistic towards the People’s Republic of China, it also asked an open-ended question —when was the last time the world saw China invade another country?
China assured funding for 2023 Pacific Games hosted by Solomon Islands in the form of grants and the main stadium would be a gift from Beijing. But, the infrastructure project will not provide local employment, as Chinese companies bring their own construction workers. In the future, maintenance of such infrastructure facilities will be a great challenge for the government of Solomon Islands, as it became for Vanuatu, which had no budget to maintain the Chinese-funded national convention centre.
There is an ongoing assessment by Solomons’ Finance Ministry regarding $US100 million loan offered through a Chinese broker[1]. Matters such as restrictions on the usage of loan money, determination of loan’s interest rate and the duration of loan which could be twenty years or more are not yet settled. Denton Rarawa, the previous governor of the Solomon Islands Central Bank showed displeasure over government proposals, warning this could land Solomon Islands in China’s debt trap. We may also note that the traditional donor, Australia imposes strict supervisions on aid programs and pays attention to economic and political reforms in the Pacific region, Chinese assistance, on the other hand insinuate a “no strings attached” strategy as a bait. Clearly, China seeks supremacy over other donor countries to advance its geostrategic interests.
The Solomon Islands has not yet accepted every Chinese offer on the table. During Prime Minister’s first official visit to China, he met with the leaders of Sam group, a state-connected enterprise, and invited them to the Solomon Islands. But the Solomons rejected a deal that asked for the lease of Tulagi Island for 75 years. The Island is of strategic importance – it was the Solomons’ capital under British rule for forty-six years, then a Japanese base and an American base in World War II. In 1952, the capital shifted to Honiara. The government called the deal with Sam group illegal due to a lack of vital details and ordered its termination.
This
issue raised concerns over China’s intentions. Perhaps, it wanted to challenge
the Western world by installing a military base there. Defence experts raised
similar concerns a year ago, with Chinese-funded Vanuatu dockyard, which is too
big for commercial use but a perfect location for visiting foreign navy ships –
such as a rapid Chinese move to become
two-ocean navy. Located not too far from the Australian coastline, if these
military bases come up, it can lead to military tensions in an ocean about which
Australia did not have to worry since 1942.
TheSolomon
Islands showcases a desire to be on the right side of history and normalize relations
with the People’s Republic of China. It is not the only Pacific Island country
to establish diplomatic relations with China in 2019. Kiribati followed its trail.
China’s intensified economic efforts could soon take away the four remaining
Taiwan’s Pacific allies: Tuvalu, Nauru, Palau and the Marshall Islands. Taiwan has
indicated that China has a desire to make the Pacific Ocean another South China
Sea. These actions have been disapproved by the United States who itself
switched recognition to China four decades ago. It also recently declined the
Prime Minister Sogavare’s request for a meeting with the United States Vice President,
and it has begun to reassess the aid it provides the Islands. Although China’s
plan to install a military base remains a matter of speculation, its search for
new markets and the untapped under-seabed resources remains the prime reason
for its pursuits in the Solomon Islands and South Pacific region.
[1] The deal was reported by ABC News. The article mentioned a loan deal of $US100 billion instead of $US100 million. It is important to understand that the Solomon Islands is a small economy with a GDP of $US1.3 billion (ABC News. 2020. ‘Solomon Islands discussed $US100 billion loan from Chinese businessman, according to leaked letters’. February 21).