Chinese state firms dominate Pacific infrastructure contracts

Chinese construction firms are active in the Pacific not only through Chinese-financed projects but also as contractors on projects financed by MDBs. As a result, they play a dominant and highly visible role in infrastructure across the region, one that extends well beyond China’s own bilateral financing.

Preliminary Pacific Aid Map analysis, combining multilateral contract award data with open-source project-level financing and implementation records, suggests that Chinese SOEs have been involved in more than $5.1 billion worth of Pacific infrastructure projects since 2008.^* Around $3 billion of this was financed directly by China, with the remaining share split between the ADB and World Bank (Figure 11). Over this period, approximately 40% of Pacific infrastructure projects by value involved a Chinese SOE. This share has declined somewhat in recent years as alternative infrastructure funders, principally Australia, have increased their own bilateral financing support.

Notably, although infrastructure projects directly financed by China have been lower this decade compared to last, Chinese SOEs have won a greater volume of MDB contracts, thereby maintaining their significant on-the-ground presence across the region.

ADB procurement data indicates Chinese firms were awarded 102 infrastructure contracts between 2016 and 2025 (Figure 12). Chinese SOEs won 16% of all awarded work contracts over this period, or 45% when excluding contracts awarded to local firms. The contracts awarded to Chinese SOEs were worth around $1.1 billion, accounting for more than half (52%) of total infrastructure contract value. The small share by number, but large share by value, reflects the dominance of Chinese SOEs in winning high-value infrastructure projects, while local firms typically dominate smaller contracts.

World Bank procurement data tells a similar story. Chinese SOEs were awarded 33 infrastructure contracts between 2016 and 2025, making up 7% by number but 40% when excluding contracts awarded to local firms (Figure 13). These contracts were worth $379 million in total, or 56% of total contract value, again reflecting the concentration of larger infrastructure projects among Chinese SOEs.

Under the banner of the “multilateral reform agenda”, several MDB shareholders have pressed multilateral lenders to adjust procurement regimes that they argue have advantaged subsidised Chinese bidders.^* Australia and New Zealand, for their part, have invoked the Pacific Islands Forum-endorsed Pacific Quality Infrastructure Principles as a means of pressing the banks towards procurement reform.^*

In response, the ADB introduced merit point criteria (MPC) in Pacific procurement in 2020, piloting a shift away from lowest-cost bidding towards weighted scoring against quality, technical capability, and sustainability.^* MPC has since become standard in the Pacific sub-region, and from January 2026 it became mandatory for all internationally advertised ADB contracts globally, alongside a new requirement that local labour fill at least half of person-days on such construction contracts.

Whether the new rules will materially shift contractor composition in the Pacific remains to be seen, and will depend partly on the availability of alternative contractors. In a small, geographically dispersed market with limited local construction capacity, the pool of firms able to compete on these terms may be narrow, blunting the reforms’ impact.