Strings attached: China's Pacific aid under spotlight
Posted ABC Sun Jun 22, 2008
Walk the main streets of any Pacific Island nation and you will probably see generous gifts from either China or Taiwan.
In the Marshall Islands there is a convention centre paid for by Taiwan, while in Fiji and Samoa there are sports complexes bankrolled by China.
Of course China and Taiwan expect something in return for their spending - and that is recognition.
A new report called 'The Dragon Looks South' by an Australian think tank shows a huge increase in China's promised aid to its Pacific Island allies.
The research was not helped by the fact China tries to keep details of its aid program secret.
But by using public sources, report author Research Associate Fergus Hanson found from 2005, Chinese aid across the region totalled $US33 million. By 2007 it had increased to $US293 million.
According to the Lowy research, the interest and increase has nothing to do with Chinese military expansion, as has often been hypothesised. Fergus Hanson says the only battle in China's funding is a diplomatic one.
"Chinese aid money is only going to the countries that recognise China exclusively," he said.
Within a day of the release of this report China hit back, rejecting its findings as "pointless", and saying its aid was given without ulterior motive.
But the People's Republic of China, or Mainland China and The Republic of China or Taiwan, have spent years fighting for diplomatic allegiance from other nations. In the Pacific, Taiwan is recognised by six nations, and China by eight.
Taiwan's aid program does not feature in this report, but it has already been the focus of plenty of study. One often-quoted example is the 2001 $US25 million loan from Taiwan to Solomon Islands, intended as compensation to the victims of ethnic violence.
Most of that money ended up in the pockets of corrupt politicians, police, and militia leaders. This new report has found China's aid does just as little to promote good governance.
In essence, China and Taiwan have a "No Questions Asked" policy on aid. And the actions of both is seen as an unsettling influence of the region, and the stated aim of countries like Australia and New Zealand, to use aid to promote good governance.
For their part, Pacific Island nation leaders seem happy to accept the aid, and align themselves one way or another. But that friendship rarely filters down to the people on the street.
The Chinese have a presence through business and migration in most Pacific Island nations, but that presence is resented by many Pacific Islanders.
In the case of China, the ill feeling is not helped by the way it provides aid.
Most money goes to infrastructure projects, which have to be built using Chinese companies, labour and materials. There are now plenty of new sporting complexes, colleges, conference centres and government offices across the region.
There is also plenty of animosity from islanders, already unemployed and living in poverty, who feel they got nothing out of the building project.
The insistence its money be spent on its own companies, workers and materials, has also led to an influx of Chinese-influenced architecture.
If you visit the Vanuatu Agricultural College on the island of Santo, you find a complex which would look at home on the outskirts of Beijing.
In this new report, Mr Hanson has recommended China co-ordinate its aid effort with countries like Australia, to ensure money goes to the most needed areas.
"China can't go into donor meetings and say, 'We're giving x-amount of dollars in official development assistance, aimed at primarily promoting the development of Pacific Islander countries,' because its program at the moment is shrouded in secrecy," he said.
It would also remove some of the bargaining power from Pacific leaders, who are skilled at playing aid donors against another.
But the choice might be out of their hands. Last week negotiators from China and Taiwan met in Beijing for the first time in nine years to look at ways to improve their relationship.
Diplomatic issues were not on the agenda, but Taiwan's new President Ma Ying Jaou has said he wants an end to the diplomatic war, and the drain it is placing on his country's coffers.
If Taiwan is no longer prepared to fight, it would seem unlikely China would maintain its high-spending ways out of a sense of good will. Based on a report by Campbell Cooney for Correspondent's Report.