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China scaling back 'loud and brash' Pacific funding, say researchers

SYDNEY: China’s spending spree throughout the South Pacific is drying up as Beijing instead seeks to cement its footprint in a smaller number of “friendly states”, Australian researchers said on Tuesday (Oct 31).

Over the past decade, China has lavished billions of dollars on aid and infrastructure in Pacific island nations, attempting to wrest influence from traditional regional allies Australia and the United States.

Australia’s Lowy Institute said Beijing was now scaling back this “brash” cash splash, concentrating its efforts on “China-friendly” countries such as Solomon Islands and Kiribati.

China’s spending in the Pacific reached a peak of US$384 million in 2016, according to the report, but had shrunk to US$241 million in 2021.

Lead researcher Alexandre Dayant – who has been tracking foreign investment in the Pacific – said this reflected a “strategic shift to reduce risk” and to “cement political ties”.

Kiribati and Solomon Islands both severed diplomatic links with Taiwan in September 2019, switching to Beijing in the wake of a sustained charm offensive.

China has since then financed a slew of major infrastructure projects in the two countries, and last year inked a secretive security pact with the Solomon Islands.

“China’s regional development financing has gone from loud and brash to a downsized envelope of funds, more strategically targeted at the most China-friendly Pacific Island states,” the report said.

China’s interest in the Pacific region had in recent years spurred intense “competition for influence”, researchers said, contributing to a “surge in development financing”.

Australia had been “dramatically increasing” spending in the Pacific and remained the largest donor, followed by the Asian Development Bank, China, New Zealand and then Japan.

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