October 5, 2018
In January I made frank and forthright comments raising concerns about communist China’s actions in the Pacific. My comments have been vindicated.
Months on, and many revelations later, thanks to the work of a few dedicated journalists and commentators, the extent of China’s “debt-trap diplomacy” and the strategic importance of the Pacific to Australia have morphed into recent headlines in The Australian such as “Top threat now lies in the Pacific” (22/9) and yesterday’s “US warns on China’s debt-trap diplomacy”.
After intense behind-the-scenes pressure, the Pacific was elevated to one of five priorities in our recent foreign policy white paper. Australia’s defence white paper also says the stability and security of our region is second only to the defence of Australia.
During my many visits to the Pacific when I was minister for international development and the Pacific, I was reminded of its strategic importance. History records Australia and its allies fought in theatres such as Guadalcanal, the Coral Sea and Kokoda.
Today, the sovereign threat is less confrontational but the debt-trap diplomacy just as insidious.
The high debt to gross domestic product ratio of various Pacific island countries is of genuine concern. Investment in Pacific nations is driven by the expanding demands and priorities of their people; however, it is vital that sustainable growth remains the dominant fiscal strategy.
In this regard, Australia has learned its own lesson dealing with the fiscal vandalism of past governments.
In recent years, borrowing by Pacific nations from China has escalated. Of concern is that indebted countries could be forced to forfeit assets to China to repay loans: the port of Hambantota in Sri Lanka is a case in point.
Recently, Tongan Prime Minister Akilisi Pohiva said: “We don’t want the Chinese government to take assets used as collateral for the loan … if we fail to pay, the Chinese may come and take our assets, which are our buildings, and that is why the only option is to sign a submission asking the Chinese government to forgive our debts.”
Pacific countries need to use limited government reserves to meet their loan commitments to avoid defaulting. Domestic spending and important social programs are jeopardised. Consequently, the internal stability of these countries may be affected and greater demand is placed on overseas development assistance from countries such as Australia. In short, Australian taxpayers effectively will be subsidising repayment of loans to China.
So what, then, is our China strategy?
China is not a democracy. It is a communist country. Beijing ignores international law of the sea in the South China Sea. In its bellicose illegal actions in the South China Sea, China has not demonstrated the credentials of a good international citizen.
The recently reported conduct by Beijing’s envoy to the Pacific Islands Forum demonstrates the pressure that the communist regime is placing on Pacific Islands countries to back its agenda.
Papua New Guinea’s invitation to Pacific countries to attend the Asia-Pacific Economic Co-operation summit and meet Chinese President Xi Jinping is a clear demonstration that Port Moresby is being used as a conduit for Beijing’s outreach into the Pacific. This should be of serious concern to us.
Australia spends about $4 billion a year on overseas development aid, about $1.3bn of this in the Pacific. We should be spending a greater proportion of it on our Pacific neighbours.
As minister, I strongly advocated that our primary focus shift to the Pacific. I am pleased that this includes replacing Pacific patrol boats, increasing maritime and air surveillance, redeveloping naval facilities such as that on Manus Island and supporting the development of Black Rock in Fiji as a regional humanitarian hub.
It is time we had a clear-cut China strategy that confronted the realities of the growing threats in our region. Our allies expect nothing less.
Beijing needs to heed the advice of Sun Tzu in The Art of War (in English parlance): “Do not pick a fight that you cannot win.”
In other words, Beijing, just get on with business and fair trade, thereby improving your people’s wellbeing and, above all, behave like a good international citizen.
Concetta Fierravanti-Wells is a senator for NSW and former minister for international development and the Pacific.