Saturday, 13 July 2019

Why is China Giving Loans to Tonga?

King Tupou VI and President Xi Jinping. pn464
No aid is totally free.  Our aid to the Pacific Islands comes with some expections: sources of seasonal labour, destination for our exports, obligations to support us in the UN, and so on.

But China's aid is not quite the same and it is not entirely clear what it hopes to gain from its multi-million loans to the Pacific Islands. There are certainly lots of possible explanations ranging from the altrusitic to the sinister. They want their support in international fora. They want to counter and undermine Taiwan's influence in some of the islands.. They simply want to help underdeveloped nations. They are using their aid to tie the Pacific Island nations to their apron strings with loans that must be paid back. Or they simply want to put  a spoke in the traditonal aid wheels of Australia, NZ and the USA, and make the Pacific Islands more independent of their support.

One example of China's aid is Tonga, a country of 106,000 people. It currently owes about $164 million to China's Export-Import bank. and has already asked that loan repayments be delayed. The NZ Herald asks does this Chinese largesse threaten the future of this Pacific Islands nation? Read more


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