Monday, 3 November 2014

Fiji Attracts Old Friends as China's Clout Grows

Fiji attracts old friends as China’s clout grows
By Online Editor
4:18 pm GMT+12, 30/10/2014, Fiji
After Vote, Western Nations Lift Sanctions That Had Let Beijing Establish a Foothold

By Lucy Craymer

Western nations are moving to rebuild relations with Fiji as another regional power has claimed a bigger role in the picturesque island nation: China.

The U.S. told The Wall Street Journal Thursday that it was lifting sanctions it had placed on Fiji after a military coup in 2006 and indicated it would look at ways to work with Fiji’s military again. The move comes after Fiji held democratic elections last month and follows a similar easing by New Zealand and Australia.

When the West scaled back direct government funding eight years ago after the coup overthrew Fiji’s elected government, Asia’s biggest economy stepped up its aid and investment to fill the gap.

China bankrolled several sports complexes and supported a $158 million hydroelectric-power project after the World Bank put funding on hold. Chinese loans allowed Fiji to keep investing in infrastructure and other projects even as Western government money dried up.

Now, Fiji’s traditional backers are eager to re-engage, said Maya Schmaljohann, a researcher at the U.K.’s Overseas Development Institute.

“Sanctions were designed to push Fiji back into democracy, but what they actually did was provide room for China to increase its presence in the Asia-Pacific region,” she said.

Paul Buchanan, co-founder of South Pacific analyst group 36th-Parallel, said the elections had given the U.S. the “formal green light” to drop sanctions, but that “matters of practicality as well as principles” had been involved in the U.S. decision.

“Anyone who goes to Fiji or for that matter to Tonga or Samoa can see Chinese influence all over the islands,” he said.

A U.S. State Department spokeswoman said in an email that the sanctions were lifted because of Fiji’s return to democracy and that the U.S. isn’t worried about China’s presence in Fiji: “The United States and other Pacific nations benefit from good relations and increased cooperation with China.”

Analysts have described the Obama administration’s policy of engagement and “rebalancing” toward the Asia-Pacific as part of a wider contest with China for influence over the region. Beijing has sometimes called it an effort by the U.S. to contain China’s rise.

In a drastic shift in policy, the U.S. in 2011 moved to re-engage with Myanmar after sanctions by the West had helped propel China to become the country’s primary financial and political backer. The move came even as former military leaders continued to control Myanmar.

China has tried to raise its profile across the South Pacific over the past decade. The region made up of 12 South Pacific island nations is far less populous than other parts of Asia, but has vast fishing grounds and potentially large deep-sea mineral deposits.

Beijing’s outreach was initially aimed at winning over the island nations that had ties to Taiwan to further isolate its rival. Seeking a strategic edge came later, as China extended its military reach.

To build a foothold in the Pacific basin, China has used the same mixture of loans and aid that has turned Africa into the largest regional recipient of support from Beijing.

From 2005 to 2011, China’s grants and loans to Pacific islands swelled to $850 million from $23.2 million, according to research by the Lowy Institute, an Australian think tank. In 2013, China announced $1 billion in advantageous loans to the Pacific and another $1 billion in commercial credit.

Chinese influence in the South Pacific hasn’t been problem-free. Tonga has established a no-new-loans policy after borrowing around $150 million from China between 2008 and 2010, debt that prompted the International Monetary Fund to label the country at a high risk of external-debt distress.

Of Fiji’s foreign debt, $158.5 million, or roughly a quarter of the total, is now denominated in Chinese yuan, according to an analysis by the U.K. ODI, up from just 2.6%, or $7.6 million in 2008.

Chinese companies have bought stakes in Fiji’s largest gold mine and invested in the bauxite industry. Foreign direct investment by Chinese companies in Fiji accounted for around 37% of the value of projects registered this year, compared with just 2.9% in 2009.

Huang Yong, the Chinese Ambassador in Fiji, said in an email that the China-Fiji relationship is in line with the interests of both nations and conducive to peace, stability and development in the region. “The Chinese government regards the South Pacific island countries as important,” he said.

Fiji is considered the economic and political hub of the South Pacific. Despite its small size it has aimed for a more visible global presence: It headed the Group of 77 developing countries in 2012 and has large overseas peacekeeper operations. Its economy was long dominated by Western investment, especially by U.S. and European luxury-hotel chains.

Australia, which cut military ties with Fiji after the coup, invited Fiji to send a defense representative to Canberra and said earlier in the year it wants to reinstate an Australian defense attaché in Suva. Foreign Minister Julie Bishop is set to visit Fiji this week.

The World Bank is currently working with Fiji’s government to again engage with the country, having put all new investments on hold after the coup, while the Asian Development Bank plans to “significantly” scale up the financial and technical support it provides the government.

Fiji’s government has pursued what it refers to as a “Look North” policy, improving diplomatic ties with countries including China and Arab nations. Investment Fiji said trade missions next year will head to China and Dubai as well as New Zealand and Australia to promote the country. The government didn’t respond to requests for comment on Fiji’s relationship with its traditional friends or China.

Many locals have welcomed Chinese investment, saying it has helped keep the economy from tipping into recession. One of the first Chinese projects, the 4,000-seat Vodafone stadium in Suva, was built in 2002 but remains central to Suva life and was used for the counting of votes in the recent elections.

“It’s good that [the Chinese] have plenty of money to spend and they are spending it here,” said sports fan Ronesh Prasad from behind his fruit-and-vegetable market stall in Suva.



  1. Great to see the real Fiji celebrating Melbourne Cup day! Stop whining and celebrate the day with us all croz? Is 'chip on your shoulder' a favourite?

  2. Australia and NZ's hegemonic control of the greater Pacific region is a thing of the past. Australian and NZ imperialism ought to be simply relegated to the dustbin of history. Let them now compete with China and get used to the idea that China, as a great power, has interests in the Pacifc andf will continue to pursue them with vigor and good sense. Bravo China!

  3. 'get used to the idea that China, as a great power, has interests in the Pacifc andf will continue to pursue them with vigor and good sense', such a stupid and naive thing to say. You only have too look at how they behave in africa and the locals hate their guts. Apparently for all the whining and moaning about imperial powers and the colonising of africa and the africans have learnt nothing, much like Fijian who now go cap in hand looking for someone else to give them something for free. I was just curious to see the thousands of Chinese and Indian health workers helping with Ebola. See any Jim?? Fiji and China is hardly a relationship between equals on any level.

  4. yes, yes we see, more Fiji is the victim, all things are done to helpless friendly Fiji. Hear the same from Mugabe in Zimbabwe.

  5. Oh come on, blahhhti,--for years Fiji went cap in hand to Australia and New Zealand. You can hardly justifiably call the relationship between Fiji and Australia and New Zealand "a relationship between equals on any level."
    Look, China is a great power. That's a fact. China has interests in the Pacific. That also is a fact. China is pursuing its interests in the Pacific. That is also a fact. If you have trouble with the "good sense" part of my statement--fair enough. We differ on that point. To describe what I said as "stupid and naive" is in fact stupid and naive. Your wits, to the extent that you have any, need sharpening, not to mention your logic.
    As for Ebola: you ask about the "thousands of Chinese and Indian health workers" chipping in to help. Well, may I also ask you about the "thousands of Russians, Australians, New Zealanders, Americans and Canadians, Japanese and South Koreans helping with Ebola. Obama has asked Congress for several billion dollars to help with Ebola--OK, we'll see whether he gets that.. 'Blahhhti" (by the way, why are you hiding behind a cover name?), you apparently have a visceral dislike for the Chinese--hey, be my guest, hate and despite the Chinese as much as you might like.My guess is that the Chinese are in the Pacific to stay--along with mini imperialist powers like Australia and New Zealand.
    To the extent that it is relevant--and I suggest with great respect that it is--China has never interfered in Fiji's domestic affairs nor ever taken steps to land its armed forces on Fiji's sovereign territory. In this respect Australia does not have clean hands: Australia tried to land its troops in Fiji in a disgraceful attempt to interfere in Fiji's domestic politics--remember The Australian Black Hawk that went down in the Koro Sea in in late 2006?
    Remember Australia's advance undercover agents who entered Fiji illegally in 2006? ? Remember the Australian RAMSI military adventure in the Solomons along with the Julian Moti affair? Remember Australia's role in East Timor? You should read a bit of history, blahhti, and learning a bit about how diplomacy works might help too.
    "Stupid and naive?" Take a look in the mirror, blahhhti--but before you do that brush your teeth, take a shave and use some Listerine to disinfect your mouth. Thereisnt much that you can do about your brain, apparently.
    And use your real name, take the mask off--let us all see how ugly you really are.

  6. the point was and is, that Fiji has gone from pan handling one group of countries to another. The fact that Aus 'interferes' is entirely because when we don't we end having to pay the bill anyway while the country tears itself apart like SI. The same was after eight years cosying up to China and India, the first thing Fiji is looking for is how we help THEM ??!!! what happened to the 'singapore of the pacific' the 'look north policy'?. Obviously not happy with the loans you have to pay back to China as opposed to aid. I think Aus and NZ should offer repayable loans too. Great precedent.

  7. try recognising Taiwan and see what happens...

  8. you presume to tell me how i should post ? So if it all so very clear, explain who needs who in this relationship. I would rather we invest in PNG frankly. I think Fiji could do with a bracing dose of Chinese , generosity, involvement and tourism, in particular during distater season. I think most in the region have compassion fatigue tohave aid thrown back in our faces, by countries who cause their own issues then quickly find daddy to pay for their own mistakes.

  9. this is the same regime that looks for tips on governance and control from China ?The same regime that quickly wants everyone to 'move on' and no scrutiny of what they did for eight years.! how bizarre.


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