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China-Australia relations

China funding white elephant infrastructure projects in the Pacific, says Australian minister

Canberra’s international development chief says region ‘full of useless buildings’ as Beijing increases its influence through aid and loans

PUBLISHED : Wednesday, 10 January, 2018, 3:02pm
UPDATED : Wednesday, 10 January, 2018, 10:13pm

China is funding “white elephant” infrastructure projects in the ­Pacific at unfavourable terms, a senior Australia minister said on Wednesday in comments that could fuel further tensions between Canberra and Beijing.

Friction between the two countries grew last month after Australia singled out China as a focus of concern when it proposed laws on foreign interference, drawing a furious response from Beijing.

China has been forging closer links with Pacific island nations, with Australia’s Lowy Institute estimating it provided US$1.78 billion in aid, including concessional loans, for projects in the region between 2006 to 2016.

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Australia’s International Development Minister Concetta Fierravanti-Wells said Beijing’s influence in the region was clearly growing, but criticised its development assistance as resulting in “white elephants”.

“You’ve got the Pacific full of these useless buildings which nobody maintains, which are basically white elephants,” she told The Australian newspaper.

Chinese foreign ministry spokesman Lu Kang slammed the remarks during a regular press briefing, calling them “full of ignorance and prejudice”.

“They are also irresponsible, and we have already made representations to the Australian government,” he said, adding that Fierravanti-Wells should “engage in self-reflection”.

Fierravanti-Wells said in her 24 trips to the Pacific as part of her international development portfolio she had come across “non­-productive infrastructure” that was not regularly maintained and not used to full capacity.

“I’ve gone to [the Pacific] 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 added.

The minister also warned that unlike loans from the World Bank and the Asian Development Bank, Chinese financing had less than favourable terms.

“We don’t know what the consequences are when [Pacific nations] have to pay back some of these Chinese loans,” she said.

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China has diplomatic relationships with eight Pacific island nations – the Cook Islands, the Federated States of Micronesia, Fiji, Niue, Papua New Guinea, Samoa, Tonga and Vanuatu.

Six other Pacific countries recognise Taiwan, which China sees as part of its territory.

The largest amount of aid over 2006 to 2016 – US$632.46 million – went to Papua New Guinea, the Lowy Institute said.