Challenging the Pacific Powers: China’s Strategic Inroads in Context

This post is reprinted from Michael Green’s foreword to the newly released report from CSIS, China’s Maritime Silk Road: Strategic and Economic Implications for the Indo-Pacific Region.

December 20, 2018
December 20, 2018  |  AMTI BRIEF

Challenging the Pacific Powers: China’s Strategic Inroads in Context

The Pacific Islands are emerging as yet another arena of competition between China, the United States, and other powers. Beijing’s influence in the region has surged over the last decade alongside its rapidly growing aid and infrastructure investments. On the sidelines of the 2018 Asia-Pacific Economic Cooperation summit in Papua New Guinea, President Xi Jinping held a high-level meeting with Pacific Island leaders, announcing new partnerships and signing many of them up as official participants in China’s Belt and Road Initiative. While China’s financial assistance has been mostly welcomed by Pacific nations, some recipient countries along with outside parties have begun to express concerns. Many of China’s larger infrastructure projects in the region have provoked the same anxieties as those seen in Southeast Asia, the Indian Ocean, and elsewhere. These include concerns about unsustainable debt levels, political strings attached to Chinese aid, and, in some cases, the potential for China to use port and airport projects as a means of gaining military access to the region.In response, Australia and New Zealand have refocused economic and diplomatic efforts in the region, and Canberra has begun jockeying to outbid Beijing on certain strategic investments in the region. After seeing its assistance and influence in the region plummet in recent years, the United States has also begun to reverse course, with Vice President Mike Pence making a strong pitch for the United States as an alternative to Chinese investment during the recent APEC meetings. But despite the flurry of attention on Chinese inroads, Beijing remains an outsider in a region long-dominated, especially militarily, by the four resident powers, Australia, New Zealand, France, and the United States.Scroll on to explore the military presence of the four resident Pacific powers, followed by an examination of strategic port and airport projects in which China has either invested or expressed interest. The interactive map on our website has further details when selecting each base. Only facilities that host naval, air, or significant expeditionary forces are shown. This is not intended to be an exhaustive list of military bases or China’s involvement in Pacific infrastructure projects. For example, the China Harbour Engineering Corporation’s flawed development of the Lae Port Tidal Basin project in Papua New Guinea was not addressed because the Asia Development Bank is funding the project, not China. In the case of Australia, only facilities in the eastern half of the country are displayed. This feature is optimized for viewing on desktop, and will have limited capabilities on mobile.

United States
The United States has been a resident power in the Pacific since 1898 when it occupied Guam and the Philippines in the wake of the Spanish-American War and annexed the Hawaiian Islands. Today the United States maintains military facilities across the Pacific, with large bases on the island of Oahu in Hawaii and on Guam, and smaller airfields between.

In addition to the state of Hawaii, the United States has 10 territories in the Pacific Ocean, only three of which are inhabited: Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. The independent nations of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia have also been covered by Compacts of Free Association with the United States since 1986 (1994 for Palau). Under the compacts, the United States provides these nations with economic assistance, allows their citizens largely unrestricted access to the United States, and provides for their defense. In exchange, they provide the United States with exclusive access to their lands and waters for “strategic purposes.” The compacts with the Marshall Islands and Micronesia were renewed in 2003 for another 20 years, while the U.S. Congress approved the renewal of the compact with Palau in 2017 after a seven-year delay.

France has maintained a substantial presence in the Pacific since the mid-nineteenth century when it established a series of protectorates and later annexed several island kingdoms. There are currently three French administrative areas in the South Pacific: French Polynesia, Wallis and Futuna, and New Caledonia. French Polynesia and New Caledonia both host air and naval facilities. New Caledonia held a referendum on independence in November 2018, with voters narrowly electing to remain a part of France. The collectivity could hold another referendum in 2020 and French Polynesia could follow suit.

Australia has served as a diplomatic, economic, and military leader in the Pacific for decades. Its easternmost territory, the formerly self-governing Norfolk Island, lies between New Caledonia and New Zealand. Australia administered the trust territories of Papua New Guinea and Nauru following World War Two until their independence. It also led the International Force East Timor peacekeeping operation from 1999-2000 and the multinational Regional Assistance Mission to the Solomon Islands from 2003 to 2017. Australian Defence Force units currently engage in disaster relief, training, and other operations across the region. According to the Lowy Institute’s Pacific Aid Map, from 2011-2018 Australia spent more on aid in the Pacific than the next five donors combined.

New Zealand
New Zealand has strong links to the smaller Pacific Island nations on its doorstep. In addition to the territory of Tokelau, New Zealand has Compacts of Free Association with the independent Cook Islands and Niue. New Zealand helped lead the Regional Assistance Mission to the Solomon Islands and its military regularly engages in training, disaster relief, and maritime security missions across the Pacific. The government of Prime Minister Jacinda Ardern has announced a “Pacific reset” policy to boost soft power and economic diplomacy in the region. The country has boosted its foreign aid budget to nearly $500 million over the next four years, most of which is earmarked for the Pacific Islands.

Luganville Wharf, Vanuatu

The nearly 1,200-foot wharf on Espiritu Santo, Vanuatu is the longest in the South Pacific, capable of hosting multiple cruise liners or cargo ships at once. The $93.4 million wharf was paid for via a loan from China and built by the Shanghai Construction Group, a Chinese contractor. Although Vanuatu officials had high hopes for the wharf’s business prospects, the Sydney Morning Herald reports that revenue has not been living up to predictions. In April 2018, reports out of Australia warned that China had paid for the wharf in the hopes of docking naval vessels there as part of a permanent military presence, and that Chinese and ni-Vanuatu officials had held preliminary discussions on the prospect. Officials from both nations denied the reports.

Faleolo International Airport, Samoa
In May 2018, Samoa unveiled its newly-renovated Faleolo International Airport outside the capital, Apia. The upgraded airport has a new terminal more than double the size of the old one and will allow as many as 600,000 passengers a year. The two-stage project was funded by China’s Exim bank and the World Bank for nearly $60 million and was built by Shanghai Construction Group. Samoa owes China more than $160 million, or nearly half of its total external debt. Prime Minister Tuilaepa Sailele Malielegaoi has rejected concerns that the country’s debt level is unsustainable or that Pacific Island nations should seek loan forgiveness from China.

Vuna Wharf, Tonga
Vuna Wharf was rebuilt in 2011 thanks to a $18.3 million loan from China’s Exim bank. China Civil Engineering Construction Corporation was contracted to repair the century-old wharf, which has helped attract cruise ships and much-needed tourism to the capital, Nuku’alofa. Because of this and other large projects, Tonga owes China more than $115 million, or one-third of its GDP. In August 2018, Tonga’s prime minister ʻAkilisi Pōhiva called on Pacific Island states to collectively push China to forgive their debts, but quickly reversed course. At the APEC forum in November, Tonga agreed to join China’s Belt and Road Initiative and Beijing agreed to delay repayment of its loans for five years.

Pacific Marine Industrial Zone, PNG
The Pacific Marine Industrial Zone (PMIZ) in Madang, Papua New Guinea was conceived as a major facility to enhance PNG’s fishing industry. The project was launched over a decade ago with an initial loan of $95 million from China’s Exim Bank. A wharf and ten tuna canneries were planned, with room for other relevant infrastructure. But despite spending $9 million of the original loan, the project struggled to move forward. Prime Minister Peter O’Neill announced a relaunched construction phase in 2015, predicting the industrial zone would earn the country as much as $4 billion per year once completed. To cover the new construction, China canceled the original loan and extended a new one of $156 million. But as of 2018, the project has little to show beyond an access road, fencing, and a gate.

Black Rock Camp, Fiji
The Black Rock Camp—officially the Peacekeeping and Humanitarian Assistance and Disaster Relief Camp—is a pre-deployment training camp for the Republic of Fiji Military Forces in Nadi. China put in a bid to redevelop the site, which, according to The Australian, would have included building an airport. But Fijian officials instead accepted a rival bid from Australia, which was reportedly a more comprehensive deal that will see the  camp become a regional training hub for militaries in the South Pacific.

Lombrum Naval Base, Papua New Guinea
Lombrum Naval Base is a Papua New Guinea Defence Force (PNGDF) patrol boat base on Manus Island. It started as a U.S. Navy base during World War II, became a Royal Australian Navy refueling and storage port in the 1950s, and was handed over to the PNGDF in 1974. PNG has used the base for routine patrols and fishing surveillance, but the wharf is small and run down. China reportedly expressed interest in developing the strategically-located port at Lombrum earlier this year. In response, Australia signed a $3.6 million contract in September to upgrade the wharf and other infrastructure under its Pacific Maritime Security Program. During the Asia Pacific Economic Cooperation forum in Port Moreseby, PNG in November, Vice President Mike Pence announced the United States would partner with Australia and PNG on the project.

Australia, New Zealand, France, and the United States are resident powers in the Pacific whose military facilities and longstanding security partnerships allow them to project power, to varying degrees, across the region. China currently lacks that ability. But as it seeks to develop a blue water navy and expeditionary forces capable of operating beyond East Asia, China is unsurprisingly interested in obtaining access to strategic ports and airfields like Lombrum, Black Rock, and perhaps Luganville in the Pacific Islands. It has done the same in the Indian Ocean at Djibouti, Gwadar, and possibly other locations. But while anxiety over eventual Chinese military access to such facilities is understandable, ballooning debts and the political strings attached to delaying or forgiving them present a more immediate and widespread problem for Pacific Island nations and the interests of the region’s traditional powers.

This map draws on data from a number of sources, including the Lowy Institute’s Pacific Aid Map, the websites of the U.S. Department of Defense, Australian Defence Force, New Zealand Defence Force, French Ministry of the Armed Forces, and regional news reports.

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The Center for Strategic and International Studies (CSIS) is a bipartisan, nonprofit organization founded in 1962 and headquartered in Washington, D.C. It seeks to advance global security and prosperity by providing strategic insights and policy solutions to decisionmakers.

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