Coalition attack on China over Pacific aid

Senator Concetta Fierravanti-Wells launches an extraordinary ­attack on China for loaning funds to Pacific nations on unfavourable terms.

International Development Minister Concetta Fierravanti-Wells.

Malcolm Turnbull’s International Development Minister has launched an extraordinary ­attack on China, accusing it of lending funds to Pacific nations on unfavourable terms and constructing “useless buildings” and “roads to nowhere” in the ­region.

Senator Concetta Fierravanti-Wells said there was no doubt China had been “duchessing” politicians in the Pacific, but Beijing’s activities were being met with growing resentment among some island communities.

China transferred at least $US1.8 billion ($2.3bn) in aid to South Pacific nations from 2006 to 2016, including through concessional loans, according to a Lowy Institute project mapping Chinese development assistance to the region.

Senator Fierravanti-Wells told The Australian that China’s influence was “clearly growing” and the country’s development assistance across the South Pacific was resulting in “white elephants”.

“You’ve got the Pacific full of these useless buildings which nobody maintains, which are basically white elephants … I’ve gone to islands and you’ll be driving along on some back road and all of a sudden you see this Chinese road crew building a road to nowhere and you think ‘hmm, what’s all that about’,” she said.

Pacific political leaders have sometimes directly benefited from projects. In 2015 as part of a $US1.5 million donation of agricultural equipment from the Chinese government, Cook Islands MPs received free quad bikes for their use.

 

The minister’s comments follow a brawl with China over foreign interference in Australia, during which Beijing rebuked Mr Turnbull and lodged an official complaint. The government has also come under attack from Labor, which claims the inadequacy of the Coalition’s Pacific policy has established a national security “blind spot”.

Senator Fierravanti-Wells said that on her 24 visits to the Pacific as Minister for International Development and the Pacific, she had come across nations concerned about the use of foreign workers in aid projects and countries struggling to maintain ­donated facilities. “Over my visits, I have come across a number of non-­productive infrastructure where no provision is made for maintenance and therefore the buildings are not used to full ­capacity,” she said.

Senator Fierravanti-Wells said China’s loans to countries in the region often had less than favourable terms, the impact of which was increasingly being exposed in loan applications to the World Bank and the Asian Development Bank — two institutions scaling up lending to the region. She said that while the terms of loans from the World Bank and the ADB were clearly set out, “we don’t know what the consequences are when (nations) have to pay back some of these Chinese loans”.

Lowy Institute Pacific islands program director Jonathan Pryke said there was “some legitimacy” to the minister’s point. “Any of these projects (and there are quite a few) that have ‘sport’ or ‘conference’ in the description, you can guarantee are not going to get you a return on investment, especially if they are built with a loan,” he said. “The same goes for mammoth government buildings.”

While an $18.5m Chinese ­government grant funded the construction of the new Waigani Convention Centre in Port ­Moresby, the government is set to build a second convention centre, APEC Haus, with the help of gas exploring giant Oil Search to use during the November APEC meetings. The Vanuatu Daily Post reported in August the government was struggling to maintain the Vanuatu Convention Centre, built with a $US28.5m grant from the Chinese government, and pay for electricity to the site.

Chinese assistance to the region is expected to expand. A ­recent report from the Australian Strategic Policy Institute said China was “the most significant non-traditional external power in the South Pacific”. Mr Pryke said not all Chinese aid in the region was problematic.

“Expanding existing university facilities, rehabilitating ports, expanding road networks in urban areas, improving ICT capabilities of government — all of these appear at least defensible,” he said.

He cautioned against dismissing Chinese aid as wasted as it could “minimise our ability to ­effectively engage with China in the future” to improve aid projects.

Department of Foreign Affairs and Trade secretary Frances ­Adamson has raised concerns about Chinese aid in the Pacific. Late last year the government came under attack from the opposition, with Labor defence spokesman Richard Marles arguing the Pacific was “the biggest blind spot in Australia’s national security policy”. He suggested Australia was not aggressive enough in pressing its defence and government service programs on Pacific nations to stop them choosing support from China instead.