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South Pacific or the region known as Oceania comprises of more than 10,000 islands divided into sub-regions of Australasia (with Australia and New Zealand), Melanesia (Vanuatu, Fiji, Solomon Islands and Papua New Guinea), Micronesia (Federated States of Micronesia, Palau, Kiribati, Nauru, the Marshall Islands, US territories of Guam, Northern Mariana Islands and Wake Island), Polynesia (New Zealand, Hawaii, Samoa, Tonga, French Polynesia, etc.)1 While many of the Pacific islands’ have small landmass, their total exclusive economic zones (EEZs) span nearly 7.7 million sq. Miles of space in the Pacific Ocean. 2 These EEZs are resource-rich, and strategically the islands are crucial as they can act as key launching or refuelling points for operations in the vast expanse of the Pacific.

Till recent years, China’s actions and engagement in the South Pacific were mainly seen as part its outreach to Pacific island countries in order to wean them away from Taiwan (many island states have diplomatic ties with Taipei). But since Xi Jinping’s ascendance, Beijing has been far more assertive and looked at the region more strategically. After building up artificial islands in the South China Sea and militarizing those, China feels it can push furthermore into the Pacific to project power, breaking out of the so-called ‘first-island chain’ and then the ‘second-island chain’ that geographically hems it in. The larger goal is to challenge US dominance in the Pacific and a foothold in the South Pacific would give China the ability to check the US (Guam base) and its partners in the region. 3

The US in its annual report US-China Economic and Security Review Commission 2018 highlighted that Beijing’s South Pacific strategy is driven by “its broader diplomatic and strategic interests, reducing Taiwan's international space and gaining access to raw materials and natural resources". It further added, "If Chinese activities deter the US from carrying out its military training and exercise] plans for the Commonwealth of the Northern Mariana Islands, it will contribute to China's goal of weakening US military presence in the Indo-Pacific." 4

According to figures compiled by Australian think-tank Lowy Institute, since 2011 China has surpassed New Zealand to become the second highest donor to the Pacific Island countries with donations and concessionary loans. It has spent US$ 1.3 billion in comparison to NZ’s US$ 1.2 billion and Australia’s US$ 6.6 billion. The data further suggests that about 67% of Chinese aid has been given as loans and only 32% is in the form of grants. 5 Some of the island countries are quite poor and badly need funding for infrastructure and other development projects. China has slyly stepped in to fulfill that need by splashing around cash with what is often described as ‘checkbook diplomacy’ i.e. diplomatic use of economic largesse to influence others foreign policy decisions, in return gaining influence in the respective countries and behold them with debt. It then leverages that to influence the policies of these sovereign nations. For instance, once known for its independent foreign policy, Vanuatu became the first nation in the region to support China’s claims in the South and East China Seas and others like Nauru and Papua New Guinea have followed suit.6 Many small island countries like Tonga and Vanuatu are already struggling to pay back Chinese debt.7

Any country that dares to not bow down to Beijing’s wishes has to pay heavily. This was illustrated clearly when Beijing used tourism as a weapon to punish the tiny Pacific island nation of Palau for its continued diplomatic relations with Taiwan. Beijing banned tourist groups and further investments in Palau.8 As many of these island nations sell citizenship and passports, there is a growing concern over the influx of Chinese people in the form of labor and other immigrants. In Vanuatu (population 300,000), there are plans to build two Chinese cities hosting 10,000 to 20,000 people. This stokes fears of being swamped by not only Chinese largesse by also demographically.9

As an island nation that is totally dependent on maritime trade, for the predominant power in the South Pacific i.e. Australia, the security of sea lanes is a vital strategic objective. The Australian Defense White Paper 2016 clearly states: “Australia cannot be secure if our immediate neighborhood including Papua New Guinea, Timor-Leste and Pacific Island Countries becomes a source of threat to Australia. This includes the threat of a foreign military power seeking influence in ways that could challenge the security of our maritime approaches…” and further adds that “Australia’s reliance on maritime trade with and through South East Asia, including energy supplies, means the security of our maritime approaches and trade routes within South East Asia must be protected, as must freedom of navigation, which provides for the free flow of maritime trade in international waters”.10

Australia is beginning to see China’s forays and massive investments into South Pacific countries with great concern. The region is considered by Australia as its own ‘backyard’ and prospects of debt-trap diplomacy and a potential Chinese naval base close to its eastern shores have spooked Canberra and led to reactive policies being pursued.11 For the first time in 70 years, the region’s strategic significance in Australia’s security calculus is being revived. No wonder then, South Pacific was a key priority area mentioned in the Foreign Policy White Paper (2017), promising a ‘step up’ in engaging the region and integrating further economically and security wise.12 Last year, Australia edged China out of a project to build an undersea telecommunications cable between Papua New Guinea and Solomon Islands.13

As part of its Pacific ‘Step Up’ strategy, Canberra has announced that it would set up the Australian Infrastructure Financing Facility for countries in the Pacific region with a $2 billion infrastructure initiative “to significantly boost Australia’s support for infrastructure development in Pacific countries and Timor-Leste”. 14

On the security side, Australia has signed a major joint initiative with Papua New Guinea for the construction of Lombrum Naval Base on the Manus Island. 15 The island was used as a major naval staging post during World War II by the US after it successfully pushed back and overtook the base from the Japanese forces that were advancing toward the northern coast of Australia. This joint naval base would give the Australian navy a prime location to defend the vital sea lanes that carry trade throughout the region. The Defense White Paper mentions that “The Government will work with Pacific Island Countries to strengthen their ability to manage internal, transnational and border security challenges … This includes working to limit the influence of any actor from outside the region with interests inimical to our own.” In this regard, Canberra has reinforced its commitment of 30-year, A$2billion Pacific Maritime Security Program, that promises delivery of 21 patrol boats to regional nations and providing training, support and officer development, providing people-to-people connections and the introduction of specialized, large-hulled, multi-purpose amphibious ship to support increased engagement in the Pacific region. 16

One of the problems with Canberra’s approach in the region has been its neglect of the island nations for a long time.17 Its policies are now perceived largely as reactive and driven mostly by geopolitical considerations. The biggest challenge facing the Pacific islands is considered to be climate change for them. The rising sea levels are an immediate issue of survival for the island nations. Australia’s somewhat lukewarm approach and laggard policy to tackle climate change won’t help it further its agenda in the region.18 The Australian PM, Scott Morrison, on a recent visit to the region was called out by the PM of Fiji, Voreqe Bainimarama, who said if Australia shifted away from its coal and mining industries it would help the survival of Pacific island countries threatened by rising sea levels. PM Morrison in return gave no specific plans on clean energy transition and gave a rather vague statement saying Australia had commitments on emissions reductions in a "comprehensive response" to climate change.19 In this regard, China has taken the moral high ground by emphasizing its strong support for the Paris climate deal and promise of sustainable development for the region. Moreover, the island nations loathe the idea of being mere pawns in the big power games and want to maintain calm in their serene region.

India that has diaspora links in the region, prominently with Fiji has courted the island countries through its Forum for India Pacific Islands Co-operation (FIPIC).20 As China moves into the Indian Ocean, the region can act as a counter-balance to it. India can work with partner countries that also have significant stakes such as Australia, New Zealand, France, Japan, and the US to give impetus to its Indo-Pacific strategy in the region.21 India’s stand on climate change is well-appreciated in the island countries, and it can further help these countries by increasing support in capacity building, disaster management, sustainable energy options and development of the blue economy.

The region of South Pacific has mostly been peaceful since the end of the Second World War. The rising influence of China and the concomitantly increasing strategic competition along with challenges like climate change is threatening to change that. From Australia’s point of view, it not only needs to step up its game in the South Pacific but also see to it as to how best it aligns that with its larger Indo-Pacific strategy. Another thing that Australia would be better off with is not to compete with China dollar-by-dollar but instead work to its strengths such as presenting an open and inclusive development model that is sustainable. It needs to work on its climate change policy to gain further trust in the region. This presents an opportunity also for the regional countries to extract positive benefits but whether the Pacific Island countries can manage and leverage the increasing competition to their advantage and not get entrapped by it largely remains to be seen.

Image credit: Lowy institute

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Written By Amandeep Hanspal

Software engineer turned geopolitical enthusiast.

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