Last year China announced multi-million dollar
handouts for eight Pacific island nations
As part of its Asia season, People & Power explore how the rivalry between China and Taiwan is playing out in the South Pacific.

Apia, the capital of Samoa, a tiny cluster of islands in the South Pacific, is not far from its idyllic picture-postcard beaches.

It is a bustling construction site that recently hosted the 2007 South Pacific Games - the region's biggest-ever sporting event - in the newly refurbished Apia Park Stadium.

It was a prestigious and costly event but Samoa was not paying. China paid.

Samoa is just one of eight Pacific Ocean island nations benefiting from China's generosity.
 
Last year the Chinese government announced multi-million dollar handouts across the region and cancelled debts.

Building frenzy

Thanks to China, Samoa also got a government office block and a swimming complex. Tonga got a brand new high school and Fiji a million dollar sports stadium to name a few such projects.

Dixon Seeto, the president of the Fiji Hotel Association and a Fijian-born Chinese, says: "They offered three billion yuan to develop various types of industries and one which is on my mind is tourism. I think we should take more advantage of that.

"The other one is obviously they have also pledged to put in an early warning system for tsunamis and natural disasters. We should really get into that quickly and take advantage of things like that."

There are other major aid donors in the region but many international observers are asking why China is being so generous.

'One China'

Tuilaepa, Samoa's prime minister,  has no
qualms about supporting China in return for aid
Zhang Yuanyuan, the Chinese ambassador to the South Pacific, says: "We want to share our development benefits and development experience with other fellow developing countries."

But he also admits that there is a strategic reason for sharing its wealth - China needs allies at world forums.

He says: "Some of them are UN member states and when it comes to important international issues these countries have a voice, these countries have votes."

Tuilaepa Sailele Aiono Malielegaoi, the Samoan prime minister, has no qualms about supporting China in return for aid.

He says: "The one policy support that they always ask us is the One China policy and that immediately brings into focus the two China's – the People's Republic of China and Taiwan. And we have consistently for the last 31 years been giving support for the People's Republic of China."

China's favour-buying strategy in the South Pacific is not just about votes. Taiwan is also a major factor.

'Playground'

Michael Field, a journalist, says: "The Pacific countries are actually being used as a playground or a game board for the two China policy. The two China's are warring with each other."

The countries split amid civil war in 1949. China still considers Taiwan part of its territory and wants it out of the Pacific.

Field insists the rivalry is fuelling corruption and aid dependency in the governments of the Pacific islands.

"The sinister fact is that you're selling yourself to get the infrastructure and so you lose your independence of action on world forums. 

"Are these countries going to speak out against human rights abuses in China? Are these countries going to argue that the massive amount of CO2 emissions that China is producing now is actually affecting their sea beds and their resources? No they're not because they're dependent on it."

Taiwan says that China tried to sever its 23-
year friendship with the Soloman Islands
In return for diplomatic relations and recognition of it as a sovereign government, Taiwan funds rice fields in the Solomon Islands as well as donating thousands of dollars to the national hospital for medical equipment and medicines.

But it claims that China has tried to sever its 23-year friendship with the Solomon Islands.

Antonio Chen, the Taiwanese ambassador to the Solomon Islands, says: "We did not initiate this diplomatic fight. China ignited it. We don't put any conditions, that if we have diplomatic relations they cannot have diplomatic relations with China. Our policy is make friends with everyone. Make no enemies."

"Such aid is not very helpful and it's encouraging malpractices in terms of governance, in terms of economic development and so on," says Yongjin Zhang, an international expert who has been observing the diplomatic fight for more than a decade.

Political instability

Yongjin suggests that political instability has intensified over the last decade as many Pacific nations switch sides from time to time.

In 1998 Tonga's royal family ditched Taiwan after an 18-year relationship. Tongan's were shocked. They were Taiwan's oldest allies in the region.

Field says: "Suddenly they've switched sides from Taiwan to China simply so that one of their members, Princess Pilolevu, could do satellite business with China because she's decided that there's more money to be made out of 1.2billion Chinese than there is out of Taiwan."

China now occupies the old Taiwan embassy and provides the bulk of Tonga's aid.
 
Yongjin says: "Aid is not borrowing money, I mean they just get it almost for free and that's one of the attractions. That's also the problem. This kind of aid actually has been used in a very corruptive way to benefit individuals and not the nation."

Economic ramifications

Following attacks in the 1990s, Chinese
shopkeepers in Tonga now work behind bars
The diplomatic war between China and Taiwan also has economic ramifications.

Field says: "It's a war of economics on several dimensions. One of them is a really basic war of resources. 

"The Pacific is home to one of the world's largest tuna fishing grounds. 

"China and Taiwan are fighting each other for it. There are other players involved – Japan and the European Union also want a piece of the action."

But Taiwan simply cannot compete with China. 

The Chinese have invested about $214 million in Tonga and they own more than 3,000 shops and businesses.

In the 1990s the King of Tonga sold citizenship to the Chinese. They now own 70 per cent of retail shops in the capital Nuku'alofa.

At the time, Tongans saw their jobs under threat and attacked Asian immigrants, who now work behind barriers.

Ofi Simiki, the president of the Tonga Business Association, is worried about China's expansion.

She says: "Chinese people use their own people and you know we don't understand how it happened in front of our eyes. Well we don't want the Chinese people controlling everything here in Tonga."

There is no doubt that China's investment is helping build infrastructure that Pacific island governments cannot afford. 

But just how far does it intend to go - politically, diplomatically and economically in the region?

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Source: Al Jazeera