China gave less aid to Pacific despite increasing engagement, Australian report says
- Chinese aid to the Pacific shrank by 31 per cent in 2019 to US$169 million, the Lowy Institute said in its Pacific Aid Map report
- Some factors could be that Pacific nations have become more discerning about their aid options, or China is more focused elsewhere, a researcher said
Chinese aid to the Pacific shrank by 31 per cent in 2019 to US$169 million, the Lowy Institute said in its annual Pacific Aid Map released on Wednesday.
Only the World Bank pulled back more that year, but that had been expected after aid tripled between 2017 and 2018 through an extraordinary burst of investment, said Jonathan Pryke, Pacific Islands programme director at the international policy think tank.
“There has been a consistent level of growing engagement from China in previous years and we’ve seen this sharp decline in 2019 which is against the narrative,” Pryke said.
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The map is a database covering 66 donors and tens of thousands of aid projects in 14 Pacific island sovereign nations, which exclude the French territories of New Caledonia and French Polynesia.
Data since 2019 including the impact of the Covid-19 pandemic are incomplete and are not included in the latest report.
Pryke said preliminary data since 2019 suggested that China’s lowest contribution to the Pacific region since 2012 was not an anomaly.
“We’ve done some cursory analysis of 2020 on China as well and we haven’t seen a bounce back,” Pryke said.
[Pacific islands] become a bit more savvy about what they’re borrowing for because a lot of these projects from China haven’t panned out as they expected
International aid to the Pacific dropped by 15 per cent in 2019 to US$2.44 billion. The Lowy Institute expects data will show contributions rose last year in response to the pandemic.
It is not clear why China pulled back from the Pacific since its aid to the region peaked at US$287 million in 2016.
Pryke said he thought Pacific nations now had more aid options and were seeking better deals.
“They’ve become a bit more savvy about what they’re borrowing for because a lot of these projects from China haven’t panned out as they expected,” Pryke said.
“It could well be that China’s just not as engaged, they’re focused elsewhere. They’ve certainly been tightening the purse globally,” he added.
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The Chinese have also become less generous with the sums of aid they offer the Pacific.
In 2018, 59 per cent of the Chinese aid was offered as grants and the remainder was concessional loans.
In 2019, 67 per cent of the Chinese aid was loans, according to the Lowy Institute.
