China’s Pacific investment push lands in Solomon Islands

Chinese investors have been approached to build a new hub that could threaten Australia’s presence in the region.

The Guadalcanal airfield during WWII.

Chinese investors have been ­approached by Solomon Islands politicians and Australian business interests to build a new ­airport and maintenance facility on the Pacific nation’s main ­island of ­Guadalcanal.

The Australian has confirmed that the investment was likely to include a shopping district and investors were hoping to construct a tourism hub, in a move that could threaten Australia’s strategic presence in the Pacific region.

There has been renewed ­interest over the strategic ­dimension of Chinese investment in the Pacific Islands after International Development Minister Concetta Fierravanti-Wells aired concerns in The Australian in January about China leaving countries in their debt as a result of an increasing number of Beijing-funded aid projects.

Australian authorities have since expressed concerns about reports that Vanuatu has been in talks with China to increase military co-operation.

It is understood the Solomon Islands deal is being negotiated by Guadalcanal Premier Anthony Veke and Mines Minister Bradley Tovosia. “The project is still at its early stage,” Mr Veke told The Australian.

The establishment of a Japanese airfield on Guadalcanal in World War II was seen as a threat to American supply routes to Australia and New Zealand, posing a direct security threat to the US Pacific Fleet.

The airfield, which is now the main airport servicing Honiara, was taken from the Japanese by US marines in the 1942 Battle of Guadalcanal.

The Canberra-based BV Group of Australian businessmen Victor Ink Kai Tang and David Tai Chun Ngai is involved in bringing in Chinese investors.

Asked whether the two men were setting up the deal in concert with Chinese investors in Guangzhou, Mr Veke said: “Yes but the information will be available to the media once everything is finalised.”

Several rounds of talks have been held, including in Nadi, Fiji, about the new airport project. It is claimed it will support increased Chinese tourism on the southeast “Weather Coast” of Guadalcanal.

The Guadalcanal airfield recently.

Mr Tang told The Australian he welcomed investment in the project from any country, “not just Chinese investors”. He said the focus was tourism.

Mr Veke’s social media posts show a number of trips to China including Guangzhou. Sources said the travel had been to meet investors.

The French Polynesian ­government last month formally approved construction of a ­$US320 million Chinese fish farm, which includes the ­redevelopment of a run-down former military airport to fly the fresh fish direct to China.

The company involved has been handed tax breaks by the French Polynesian government to support the project.

Jonathan Pryke, director of the Lowy Institute’s Pacific Islands Program, said: “This certainly raised the eyebrows of some people … it’s a large piece of infrastructure that could have dual-use purposes sometime in the future … there’s been no signal from any side that is the intent, but intent can change.”

Canberra has both publicly and privately expressed concerns about increasing Chinese investment in the Pacific region.

Earlier this year, the Turnbull government agreed to pay about $100m to construct an underwater internet cable connecting the Solomon Islands with Sydney, to prevent Chinese telecommunications giant Huawei from building it instead.

The Labor governments led by Kevin Rudd and Julia Gillard denied Huawei access to the NBN rollout on undisclosed sec­urity grounds.

Since 2003, Australia has invested both funding and military and police resources in the Solomon Islands, worth up $2.6 billion, as part of the Regional Assistance Mission to Solomon Islands. Amid concerns raised about RAMSI concluding last June, the federal government pledged to continue to make a “substantial investment” in the Solomons, including maintaining “development support for justice and governance managed by DFAT, and police development, delivered by the Australian Federal Police”.

During the Commonwealth Heads of Government Meeting in London last month, Malcolm Turnbull met Solomon Islands counterpart Rick Houenipwela. Former Solomons prime minister Manasseh Sogavare visited Canberra last August.

Closer ties between the Solomon Islands and China are viewed by analysts as an interesting development considering the country is one of six Pacific ­nations that recognise Taiwan diplomatically.

“The Pacific accounts for one-third of Taiwan’s remaining support base in the UN so if there is going to be more movement, one would expect to see it in the ­Pacific region, but from every indication I’ve given it doesn’t look like China’s in a hurry,” Mr Pryke said.