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The top four myths about China in the Pacific

The top four myths about China in the Pacific

Chinese president Xi Jinping's impending visit to Fiji, where he will meet with all of the eight Pacific leaders whose nations diplomatically recognise China, means newspapers will be filled with ruminations on China's strategic influence in the South Pacific and what this means for Australia and the region. Here's a bluffer's guide to the top four most persistent myths that will stalk Australian media coverage over the next week.

1. China has a strong diplomatic presence in the Pacific

A favourite nostrum of New Zealand's cold warriors and Chinese officials, this is the most patently false myth of all. Even factoring in the low position of foreign affairs within the Chinese political pecking order (its minister struggles to make the top 50 in the Central Committee), China's representation in the South Pacific is paltry. Its ghost town embassies are typically staffed by a handful of people, many brought in from other ministries and provincial governments. Aside from East Timor, no embassy has a defence attaché. Or a café.

One ministry with clout is the Ministry of Commerce, and each embassy has an Economic Counsellor's office to represent it. In South Pacific nations, this office rarely amounts to more than one official. In PNG, the only Pacific embassy large enough to warrant a separate Economic Counsellor's Office, back in February we found only two staff responsible for China's trade, investment and aid. These officials were struggling to get through the day; there was little time to implement a grand strategy. The rule of thumb in China's bureaucracy is that importance is measured in ren, cai, wu: personnel, finances or materials. China's South Pacific embassies lack for all three.

2. China's development assistance is linked to the resources industry

The above example from PNG, the Pacific's most resource-rich nation, suggests otherwise. PNG's Economic Counsellor's Office lacks an aid counsellor, although they hoped one might arrive later in the year. In Africa, Deborah Brautigam has thoroughly debunked this myth, finding China's aid to be remarkably evenly spread, and the Lowy Institute's Phillippa Brant has similar findings for the Pacific. Large Chinese resources companies are able to access cheap lines of credit, but this not aid. [fold]

There is anecdotal evidence that the largest companies, typically the national oil companies, are able to bring the state with them in the form of complementary infrastructure investment. Alas, in PNG, home to the largest Chinese resource investment in the Pacific (China Metallurgical Corporation's $1.8 billion Ramu Nickel mine), the only evidence for this is a short stretch of road from Usino Junction to Yamagi, built with a 22 million kina Chinese government grant.

3. China's development assistance, trade and investment are used to support undemocratic regimes

Exhibit A is Frank Banimarama's regime in Fiji. A recent Wall St Journal article claimed, 'When the West scaled back direct government funding eight years ago after the coup overthrew Fiji's elected government, Asia's biggest economy stepped up its aid and investment to fill the gap.'

The first problem with this assertion is that it suggests the Chinese state is able to direct where Chinese companies invest. This was true in 1974. It's not true in 2014. Chinese companies, like other companies, invest where there's a dollar, a kina or a CFP franc to be made. Yu Changsen, head of China's premier research centre on Oceania, found that Chinese companies trade more with Pacific nations that don't recognise China than in the countries that do. The Chinese government could leverage their banks to prefer certain regions, but the numbers don't show that they actually do this. The most active Chinese policy bank in the Pacific to date, China Exim Bank, has only two youthful staff responsible for the entire South Pacific.

Despite the former Commodore's efforts to give the opposite impression, Fiji has received far less aid than its nearest neighbours, Tonga and Samoa. Fiji's largest concessional loan projects were signed off early in 2006, before Banimarama seized power, a fact missed by newspaper reports at the time which accused China of 'bankrolling a pariah military dictatorship.' A Lowy Institute report has shown that these aid projects are still struggling to get off the ground, hardly evidence of China's desperation to fill the gap left by Australia and New Zealand.

4. China's leaders have closer ties to Pacific elites than Western leaders

An oft-repeated line is that new Pacific leaders all pay their first official visit to Beijing rather than Canberra, Wellington or Washington. Aside from the obvious counterfactual that six of the Pacific's 14 leaders don't recognise China, Pacific leaders aren't that predictable. In 2004, Vanuatu's then prime minister assaulted the Chinese ambassador for questioning the presence of the Taiwanese flag.

Claims of ever strengthening elite ties are used to argue that Australia should provide the same sort of lavish visit diplomacy that China does for Pacific leaders, and stop asking them to take off their shoes at Brisbane airport. The latter is sensible, but does visit diplomacy buy close ties, or just rent them? Obama won't be sitting down with the president of Nauru, because he doesn't have to. Real influence rests in global institutions and in being able to shape the future. Will future Pacific elites be graduates of Beijing No. 4 High School or Scots College? Will they have real estate in Shanghai or Cairns? Will they follow rugby or table tennis?

Xi Jinping does represent a new challenge for Australia's diplomats. Unlike his predecessor, he does not wield power reluctantly. Already labelled the 'new architect' of reform by the People's Daily, he walks the world stage with the confidence of man looking to shape China's path for the next thirty years, as Deng and Mao did before him. This will allow him to take new paths, as recent action on China-Japan relations and the climate change agreement with the US demonstrate.

But until China appoints a defence attaché to a South Pacific nation, staffs its embassies properly, or builds a military structure bigger than a ramshackle satellite dish in Kiribati, let's not kid ourselves that the South Pacific looms large in any Chinese 'grand strategy' and thus miss the chance to work with China in a region where they have remarkably little skin in the game.

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