Despite pledging a similar amount of money to Australia, concerns remain over how many Chinese commitments actually translate into reality, and the type of loans extended by Beijing to poorer nations.
The Lowy project was supported by Australian Aid, a government agency.
Whether Beijing’s promises and highly publicized memorandums of understanding actually translate into anything on the ground is another matter however. During the 2011-2018 period, only around 21% of the money China pledged was actually spent, compared to 97% for Australia.
While China’s aid commitments would see it overtake Australia in the near future, Jonathan Pryke, director of Lowy’s Pacific Islands Program, was skeptical if actual spending would ever match Beijing’s promises.
“China is talking a big game in terms of its commitments to the region and that’s concentrated on one country, Papua New Guinea,” he said. “I’m not convinced China will (overtake) Australia. We have a much broader, much deeper degree of engagement than China has.”
Canberra concern
Some in Australia have expressed concern Canberra is losing out in influence to Beijing, as successive conservative governments have cut aid spending to the Pacific as China has upped its involvement.
Pryke said that “if there’s an upside to Chinese engagement in the Pacific, other than bringing resources for development, it’s forcing Australians and New Zealanders to up their game.”
While Canberra may be uneasy about a potential Chinese military presence near its borders, for its part, China has expressed concern over Australia’s involvement in the South China Sea, which Beijing regards as Chinese territory.
Beijing build up
Concerns over the amount of debt Beijing loads onto recipient countries have been raised outside of the Pacific.
Over the period 2000-2014, China spent almost as much as the US, AidData executive director Brad Parks told CNN in October, “but the color of the money — even though they’re providing roughly comparable amounts — is very different.”
Much of the aid did not match OECD criteria for official development assistance — the type of spending most people think of with regard to overseas aid — and had “no detectable effect on economic growth,” AidData found.
Lowy’s Pryke said that Chinese projects are far larger and more headline-grabbing compared to other donors.
“The average size of an Australian aid project is a tenth of the size of a Chinese project. Whereas China has about 200 projects, Australia has over 4,000, so that gives you a sense of how spread out we are,” he said.
Given in the form of loans, such projects can create onerous commitments for developing nations, which may struggle to pay them back even as they see no tangible benefits.
Speaking with regard to the Pacific, Cheng said “we have always been sensitive to any possible debt burden and any items that we have in cooperation with those countries, we are very careful about their ability to come back to the debt.”
The biggest concern for China hawks in Australia is that highly indebted projects in neighboring Pacific nations will go the way of Sri Lanka’s Hambantota port.
Source : Nbcnewyork