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Apec: What China wants from the Pacific



  A woman crosses a street with a billboard on which the Prime Minister of Papua New Guinea, Peter O. Neill (above L), shakes hands with Chinese President Xi Jinping, and the message

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Caption

On a billboard in Port Moresby, the leaders of China and Papua New Guinea are shaking hands

These days in Port Moresby, a bar joke about how the Chinese were willing to finance the construction of the city's main boulevard.

In a recent trip to Beijing, the PM of Papua New Guinea told the Chinese president how much he wanted a broad, broad street through the center of Port Moresby, the capital.

No problem, said the Chinese president. Just tell me one thing, he asked. Should it be so big that the tanks can roll like ours?

There are many such anecdotes about Chinese investments going around Port Moresby these days, and this dark joke points to some fears as Beijing's influence grows.

Increasing investment

When I pass Port Moresby ahead of the Asia-Pacific Economic Cooperation (Apec) Summit, my local guide points out all the projects that the Chinese helped build for the event. Streets, venues ̵

1; even the bus stops were built with Chinese money.

But it's not just for Apec.

Over the last decade, the volume of Chinese aid and investment has increased significantly across the Pacific, as recent studies by the Lowy Institute show.

According to the Institute's Pacific Aid Map, China's relief spending in Papua New Guinea (PNG) in 2016 totaled $ 20.83 million (£ 15.99 million). A year later, it was three times as much.

Let's put that in context.

Australia still spends much more than China in Papua New Guinea – 70% of the country's aid comes from its former colonial ruler.

Papua New Guinea is the poorest member of Apec, and about 40% of its population live on less than a dollar a day, according to the United Nations.

Locals tell me that Australia has in the past invested in areas such as education and training for better governance.

China is now investing in areas urgently needed by Papua New Guinea: infrastructure.

"China has built roads and bridges for us, and they will continue to do so," says Papua New Guinea's Chief Executive Officer, Douveri Henao.

"And it's not just in PNG. The ambition is right across the Pacific."

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Getty Images

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A Chinese-owned bus stop in downtown Port Moresby

All of this is part of China's Belt and Road Initiative, a billion-dollar program that aims to connect China to the rest of the world through trade and investment.

It's President Xi Jinping's baby – but the same Chinese ambition is what's behind Australia's commitment to a $ 1 billion fund in the Pacific Fund last week to invest in infrastructure and counteract China's growing influence here.

In addition, critics of the PNG's Chinese Aid and Investment Policy say that the problem with Chinese money is often that there is no transparency on how the funds are paid out and who they turn to.

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Media Caption Apec: The Summit on a Boat Off Papua New Guinea

Part of the problem is the lack of governance and high levels of corruption within PNG. The other problem is that Beijing often spends money first – and later asks questions.

This often leads to unnecessary and wasteful projects if the money could have been used for other urgent needs in the country such as health care.

Help becomes political

There are economic and diplomatic reasons why Beijing invests in the Pacific.

For example, there are many natural resources in Papua New Guinea, including rare earth minerals, and in the Pacific Island States, there is one-third of Taiwan's global followers – something the analysts say would affect China.

But it's China's longer-term strategic ambitions that raise the biggest questions.

"What you see now is the geopolization of aid," said Jonathan Pryke of the Lowy Institute.

"The big fear of countries like Australia and the US is that Beijing's final is supposed to build a permanent military base somewhere in the Pacific in the next twenty to thirty years, so you've seen Washington and Canberra respond to the US this way, they must increase Chinese influence in the Pacific. "

Papua New Guinea is located a few thousand kilometers from Guam, a US base.

A recent report by the US Department of Defense on China's military power shows that it is perfectly plausible that the Chinese army "wants to expand its operations beyond the first island chain and demonstrate capability, US and Allied forces, and the military to beat bases in the western Pacific, including Guam. "

Most analysts, including the Pryke of the Lowy Institute, do not believe that this will happen.

But it is already a threat to convince the Americans and the Australians to pay far more attention to the Pacific.

So it will not be just that China is spewing money this week in Papua New Guinea. The US, Australia and Japan are likely to bring gifts to the Pacific island state when they visit Port Moresby for Apec.

Papua New Guinea is now the final battlefield in the struggle for economic and political influence between China and the West.


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