China's PM Visits: Some Implications

Message Classification: Restricted

Bloomberg     -     21 Nov 14

Xi’s Pacific Islands Tour Deepens China Clout Further South

By Ting Shi 

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President Xi Jinping arrived in Fiji today as he seeks to broaden China’s economic and strategic clout in the South Pacific, building on trade ties that flourished after then-army chief Frank Bainimarama staged a coup almost eight years ago.

The Fiji trip -- the first state visit by a Chinese leader -- bookends Xi’s 11th foreign sojourn since he became president in March 2013, doling out billions of dollars to countries from Tanzania to Costa Rica and Sri Lanka. China seized the advantage when Fiji’s ties with neighbor Australia cooled after the putsch in December 2006, and total trade has since quadrupled.

It also continues Xi’s message of soft power as he balances an expanding military and claims to territory in the western Pacific against a growing economic interdependence. As host this year of the Asia-Pacific Economic Cooperation forum, Xi sought to cast China as both a partner and player in the region.

“For Xi, he has presided over a diversification of China’s diplomatic links, a more proactive foreign policy and the creation of deeper links beyond the Asian region,” said Kerry Brown, director of the University of Sydney’s China Studies Centre. “Whether there is any real depth in these relationships beyond self interest it is hard to say. But at least China is less lonely now than it was a few years ago.”

Xi’s visit follows that of the leader of another rising Asian power, Indian Prime Minister Narendra Modi, who pledged $5 million to promote small business in Fiji and a $70 million line of credit for a power plant.

‘Shared Interests’

“We have shared interests in peace and cooperation in our inter-linked ocean regions,” Modi told reporters after meeting Bainimarama Nov. 19. “We are also aware that the relationship has at times been adrift, and that our cooperation should be much stronger than it is.”

China considers itself a lasting friend of Pacific island nations, Xi said in an article carried today by the Fiji Times, according to China’s official Xinhua News Agency. China believes all countries are equal members of the international community irrespective of their size and wealth, Xinhua cited Xi as saying.

“We shall be good brothers who support each other in both good and bad times,” Xi said in the article. “Sincerity is the key to a lasting friendship.”

Education, Training

China’s president will announce “major measures” aimed at improving infrastructure, education and training with countries including Fiji, the first Pacific island nation to establish diplomatic ties with China in 1975, and seven other island nations, Assistant Foreign Minister Zheng Zeguang told reporters last week in Beijing.

China’s development will “generate huge opportunities,” Xi told a meeting of company chief executives in Beijing on Nov. 9 during APEC. Outbound investment will total $1.25 trillion in the next decade, he said.

Australia was Fiji’s largest trading partner in 2013, with China its fifth-biggest at $328 million, according to data compiled by Bloomberg. China was Fiji’s eighth-biggest trading partner in 2005, before the last coup.

China has provided about $330 million in aid to Fiji since 2006, Lowy Institute calculations show, with then-Premier Wen Jiabao attending the inaugural China-Pacific Island countries economic development forum in Fiji that year.

Balancing Act

The Fiji stop will wrap up Xi’s swing through the Oceania region, which included the Group of 20 summit in Brisbane and visits to Canberra, Tasmania and New Zealand.

“The Oceania trip brought to a full circle Xi’s diplomatic global-trotting, where he played a good balancing act between major powers and small countries,” said Wang Fan, Director of the Institute of International Relations at the China Foreign Affairs University.

Prime Minister Bainimarama, who in September won the first election since the coup, said in 2008 that Fiji would not forget China’s understanding throughout the upheavals in the country’s history.

“When other countries were quick to condemn us following the events of 1987, 2000 and in 2006, China and other friends in Asia demonstrated a more understanding and sensitive approach to events in Fiji,” he told a group of Chinese officials.

After the state visit, Xi will hold a summit with leaders of eight countries that China has diplomatic ties with in the region -- Fiji, Papua New Guinea, Vanuatu, Micronesia, Samoa, Tonga, the Cook Islands and Niue, according to Assistant Foreign Minister Zheng. The islands have a total population of 8.15 million and a combined landmass of almost 500,000 square kilometers, roughly 5 percent of China’s size, according to data compiled by Bloomberg from the CIA World Factbook.

Second Islands

Some of these countries are part of the “second island chain” often used by military strategists to describe China extending its naval reach beyond the “first island chain,” a series of islands running from the Japanese archipelago, past Taiwan to the South China Sea. The second chain would run southward past Guam toward Papua New Guinea. Guam hosts a major U.S. naval base for the Pacific Ocean.

The Pacific islands are important to China “because of their strategic regional location, in an area which China is starting to regard as increasingly in its own backyard as it aspires to become a naval power,” Brown said.

Xi in October 2013 hosted members of the Politburo Standing Committee -- China’s top leadership body -- at a conference dedicated to periphery diplomacy, which emphasized the need for a stable external environment to let neighbors take part in China’s economic growth.

Taiwan Ties

The travel done by Xi shows he “has a broader global vision that suits China’s status in the world,” featuring “a layered-structure, from periphery to near periphery to far periphery,” Wang said.

Xi will not meet during the summit with officials from Kiribati, the Marshall Islands, Nauru, Palau, the Solomon Islands or Tuvalu, which have diplomatic ties with Taiwan, an island with its own government that China claims as its own.

Their link to Taiwan doesn’t mean China “ignores” them, Zheng of the Foreign Ministry said. China and the Pacific Islands “have more cooperative space and future ties will be better under the framework of one-China,” Zheng was quoted by the Taipei-based China Times as saying, referring to China’s long-term goal of reunification with Taipei.

“It’s entirely up to them; you can’t have your cake and eat it too,” said Shen Shishun, a senior researcher at Asia-Pacific Research Centre of the China Institute of International Studies in Beijing, speaking of those nations without diplomatic ties with China. “It’ll be a choice of self-interest; and it’ll be a matter of time when they switch their diplomatic allegiance.”

Switch Allegiance

“Taiwan is involved in bilateral and multilateral initiatives aimed at improving the livelihoods of our allies in the South Pacific,” Taiwan Ministry of Foreign Affairs spokeswoman Anna Kao said in a text message. “These initiatives have been well-received by our diplomatic allies and we will continue to build on these foundations.”

Chinese aid is sometimes not as quick or efficient as assumed, according to Philippa Brant, a research associate at the Sydney-based Lowy Institute. Funding for two low-cost housing projects in Fiji’s capital Suva was promised in 2006 and construction didn’t start until 2011, she said.

“Clearly it isn’t just a matter of China pledging a loan and a project being built a couple of years later,” said Brant, who researches China’s foreign aid to areas including the South Pacific. “People there will be looking for concrete projects, not simply more pledges of assistance.”

To contact the reporter on this story: Ting Shi in Hong Kong at tshi31@bloomberg.net

To contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net Neil Western