CANBERRA (Reuters) – Small South Pacific island nations are cashing in on new aid rivalry between China and the United States as both powers vie to boost their influence in a vast region of mostly micro-nations.
The recent visit to the tiny Cook Islands by United States Secretary of State Hillary Clinton highlighted the growing significance of the region as the United States continues its “pivot” to the Asia-Pacific, analysts said.
The Clinton visit also underlined a growing Chinese influence as it steps up its aid programmes to enhance its standing among the smaller nations.
“It is very significant. It just confirms that the Pacific is becoming of greater importance, not less,” Stephen Howes, professor of development policy at the Australian National University, told Reuters.
China’s aid programme is difficult to measure, although a report by the Lowy Institute think tank in 2011 found China’s aid was worth around $200 million a year, with a heavy reliance on soft loans to finance public works.
In recent years, China’s aid and soft loans have helped build sports stadiums in Papua New Guinea and the Cook Islands, a swimming complex in Samoa, a new port in Tonga, as well as extensions to the Royal Palace in the Tongan capital Nuku’alofa.
China has also funded a new police station and court buildings in the Cook Islands capital Raratonga, and boosted aid to Fiji as western nations shunned its military government after the 2006 military coup.
During her visit to the Cook Islands, Clinton announced an extra $32 million in US aid programmes for the Pacific, ensuring the US maintains its role as the second-largest aid donor to the region behind Australia.
Clinton also said the United States could work with China in the Pacific, and played down any new China-US rivalry.
The United States spends about $300 million a year on Pacific nations, including round $100 million a year on military assistance, compared to around $1.2 billion a year from Australia.
China says it is merely seeking to help the poor and remote nations in the region develop.
“We are willing to make a contribution, along with all other parties, to help with sustainable development in the South Pacific. We are looking for cooperation, not competition,” Chinese Foreign Ministry spokesman Hong Lei told reporters.
