Apec: What China wants from the Pacific

There is a bar joke in Port Moresby these days about how the Chinese have agreed to finance the construction of the main boulevard in the city.

During a recent trip to Beijing, the Papuan-New-Guinean Prime Minister told the Chinese president how much he wanted a large and wide road through the center of Port Moresby, the capital.

No problem, said the Chinese president. Just tell me one thing, he asked. Should it be wide enough for tanks to come down like ours?

There are many anecdotes of this kind about Chinese investments around Port Moresby in recent times, and this gloomy joke highlights some of the concerns over Beijing's growing influence.

Increasing investment

While browsing Port Moresby in anticipation of the Asia-Pacific Economic Cooperation (Apec) Summit, my local guide recalls all the projects that the Chinese have contributed to the realization of this event. Roads, sites – even bus stops were built with Chinese money.

But it's not fair to Apec.

In the past decade, Chinese aid and investment in the Pacific has increased dramatically, as recent studies by the Lowy Institute show.

According to the institute's Pacific Aid Map, China's aid spending in Papua New Guinea (PNG) amounted to $ 20.83 million (£ 15.99 million) in 2016. One year later, this amount was three times higher.

Let's put this in context.

Australia still spends a lot more in Papua New Guinea than China: 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 the population lives on less than a dollar a day, according to the UN.

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

At the same time, China is investing in areas that Papua New Guinea desperately needs: infrastructure.

"China has built roads, bridges, and they will continue to do so," says Douveri Henao, director of the Papua New Guinea Business Council.

"And it's not fair in PNG – the ambition is right across the Pacific."

All of this is part of the "Belt and Roads of China" initiative, a multi-billion dollar program aimed at connecting China to the rest of the world through trade and investment.

This is the baby of President Xi Jinping – but it is the same Chinese ambition that is behind the commitment made by Australia to create a Pacific Fund of $ 39 billion last week to invest in infrastructure and counter the growing influence of China in this country.

In addition, critics of China 's aid and investment policy in Papua New Guinea claim that the problem of Chinese money here is that it is There is no transparency as to how the funds are disbursed and who they go to.

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

This often leads to unnecessary and unnecessary projects, while the money could have been used for other more pressing needs in the country, such as health care.

Help becomes political

Beijing is investing in the Pacific for economic and diplomatic reasons.

Papua New Guinea, for example, is home to many natural resources, including rare earth minerals, and the Pacific island countries are home to a third of Taiwan's supporters around the world, which analysts say China would like influence.

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

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

"The great fear of countries like Australia and the United States is that Beijing's ultimate goal is to set up a permanent military base somewhere in the Pacific in the next twenty to thirty years." is why you have seen Washington and Canberra react to increasing Chinese influence in the Pacific. "

Papua New Guinea is a few thousand kilometers from Guam, an American base.

A recent US Department of Defense report on Chinese military power shows how entirely plausible the Chinese military would "extend its operations beyond the first chain of the island, demonstrating thus its ability to strike US and allied forces as well as military bases in the country. " the western Pacific Ocean, including Guam. "

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

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

That is why it will not be just China that will spend money in Papua New Guinea this week. The United States, Australia and Japan are all likely to bring gifts to the Pacific island nation when they travel to Port Moresby for Apec.

Papua New Guinea is now the last battleground in the standoff for the economic and political influence between China and the West.