When the Solomon Islands was hit with weeklong riots and anti-government protests late last November, the unrest resulted in dozens of buildings burned down and several businesses looted and destroyed — especially in the Chinatown area of the capital, Honiara.
Describing the destruction as “the largest man-made economic shock” the islands had experienced since 2006, the government requested security assistance from Australia, Papua New Guinea, New Zealand and Fiji, which reacted promptly by sending police and military personnel to restore order.
But neighboring countries were not the only nations to offer support. Just weeks after, in late December, the Solomon Islands accepted Beijing’s offer to equip and train its riot police force, should similar unrest erupt in the future.
While the mayhem was mainly driven by several domestic issues such as poverty, unemployment and inter-island rivalries, it has rekindled caution over China’s growing influence in the country. In truth, another underlying factor behind the unrest was the government’s 2019 decision to switch diplomatic relations from democratic Taiwan to communist China. What is more, this diplomatic shift happened amid accusations by opposition politicians that “foreign cronies” were being allowed to “strip the country’s natural assets.”
But why the switch to Beijing? According to Jonathan Pryke, director of the Pacific Islands Program at the Sydney-based Lowy Institute, the government of Solomon Islands Prime Minister Manasseh Sogavare made the decision in the expectation that the country could get better economic benefits from a formalized relationship with China, which has already been dominating many parts of the local economy.
Beijing has managed to not only further reduce the number of Taiwan’s international friends and allies, but also to build influence with the local political elite in the hope of obtaining economic and strategic concessions, should the opportunity arise.
“Inadequate infrastructure has been a bottleneck in the Solomon Islands’ economic and social development,” says Denghua Zhang, a researcher on the Asia-Pacific region at the Australian National University. “With China being the world’s second-largest economy and one of the main donors in the Pacific region, it has been able to provide more economic/financial assistance than Taiwan, which is why the Solomon Islands is attracted to Chinese-funded infrastructure projects.”
Zhang said that China is funding a sports stadium that will be used to host the 2023 Pacific Games, while pointing out that the island nation’s government is also expected to deepen relations with Beijing in other areas such as mining, fishing and infrastructure.
The example of the Solomon Islands is playing out throughout the region. According to a June 2018 paper from the U.S.-China Economic and Security Review Commission, Beijing has in recent years been significantly bolstering its economic ties with the 14 sovereign Pacific Island countries.
Curtailing Taiwan’s reach
An examination of trade, investment, development assistance, and tourism data shows China has become one of the major players in the region, well ahead of the United States in most areas, noted the paper, while highlighting a development that has been seen with increasing concern by some of the traditional powers in the region such as Australia, New Zealand and the U.S.
“China has become an increasingly important market for exports from the Pacific islands, including for fisheries, wood products and mineral commodities,” said Rajiv Biswas, Asia-Pacific Chief Economist for IHS Markit, noting that the country has also become the fourth-largest provider of development assistance to these countries, through grants and concessional loans estimated to be in the order of around $200 million per year.
Although the Pacific Island countries receive less of China’s attention and resources compared to other parts of the world, Beijing has included the region in its key diplomatic and economic development policy — the Belt and Road initiative — which suggests the country has geostrategic interests in the region, beyond simply competing for diplomatic recognition with Taiwan.
For instance, in 2019 Beijing also managed to persuade Kiribati to cut diplomatic ties with Taiwan, meaning that the government in Taipei — a key U.S. ally — is now only recognized by four countries in the region: the Marshall Islands, Nauru, Palau and Tuvalu.
Such developments are not only important in terms of business opportunities for China in sectors such as minerals, energy, fisheries, logging and infrastructure development, but also diplomatically, as Beijing seeks the voting support of Pacific Island countries at the United Nations on key issues such as the status of Taiwan.
Moreover, these countries offer Beijing an opportunity to expand its soft power, including through educational and cultural activities as well as economic aid and humanitarian assistance and disaster relief operations. As a result, these islands may feel beholden to Beijing and side with it on international fora on other core issues for China such as Tibet, Xinjiang, Hong Kong and the South China Sea.
“For decades, Beijing and Taipei have been battling each other economically and diplomatically in their efforts to secure diplomatic allies among these small islands. Most of this has played out in the field of development assistance. And as China has become richer, over the past two decades, it has steadily built up tools it can use to strengthen its influence,” said Jeffrey Hornung, a senior political scientist at the U.S.-based Rand Corporation.
Economic and development aid is crucial for many of these countries, which are among the most exposed to natural disasters in the world: a problem that has been compounded by the impact of climate change.
Markets and raw materials
In this context Richard Herr, an expert on the Pacific islands at the University of Tasmania, said that China’s principal interests in this region can be broadly summed up as promoting its diplomatic and strategic priorities, reducing Taiwan’s international recognition and influence, and gaining access to raw materials and natural resources to expand trade.
That said, Beijing’s interests in this diverse region vary, depending on the country. For instance, Herr noted that the four Melanesian states — Fiji, Papua New Guinea, the Solomon Islands and Vanuatu — are economically important to China as they comprise the largest part of the region in terms of land, natural resources and people, with Fiji also being the regional communications hub.
The Micronesian states of the central Pacific are strategically important to the United States, and therefore also to China as they would pose a potential risk for Beijing should they play a part in a U.S. defense strategy involving the so-called second island chain, which stretches from the Japanese main island of Honshu through the Marianas (most notably Guam) and Micronesia down to Palau and Indonesia’s Halmahera Island.
At the same time, these countries are expected to play a significant role for China in the development of its maritime force as a “blue-water navy” — capable of operating globally — and consequently in Beijing’s defense strategy in the Pacific.
Military concerns
At present China’s security involvement in the region is limited when compared to its diplomatic and economic engagement, as only three Pacific Island countries — Tonga, Papua New Guinea and Fiji — have defense forces. Nonetheless, some analysts fear that Beijing’s growing influence over these countries could result in the Chinese military gaining a foothold in the region.
“Militarily, these islands carry geostrategic significance, both in the possibility of stationing forces and access to facilities. If Chinese forces gain some sort of military access in the region, they could potentially threaten the United States and complicate allied efforts to maintain a free and open Indo-Pacific. After all, it does not require much for China to expand its monitoring and surveillance capabilities, which would be a disadvantage to U.S. and allied forces operating in the region,” said Hornung.
At the same time, the analyst pointed out that the U.S. currently enjoys some unique military advantages in the region. For instance, in addition to having military troops and assets in the U.S. territory of Guam, it also has Compacts of Free Association (CoFA) relationships with Palau, the Marshall Islands and Micronesia. These agreements, which are expected to be renewed, provide the U.S. military exclusive access to the land, sea and air routes of these island countries.
Western support
To counter Beijing’s growing footprint in the region, the U.S. and its allies have stepped up efforts to engage with these countries in a variety of areas such as high-level visits and foreign assistance. For instance, in 2020, Washington announced more than $200 million in regional assistance, including for development aid and to address the impact of the COVID-19 pandemic, as part of a “Pacific Pledge” related to its Indo-Pacific Strategy.
Moreover, Australia has long-standing close political, economic and security ties with the Pacific island states and is by far the largest source of development assistance. For instance, in fiscal 2020-21, total Australian development assistance to the region reached 1.4 billion Australian dollars, and has been set at a similar level for 2021-22, according to Biswas.
The Singapore-based economist noted that one important new development financing initiative is the Trilateral Partnership for Infrastructure Investment in the Indo-Pacific between Japan, Australia and the U.S.
“Palau is an early winner from this new initiative, which will finance the construction of a $30 million fiber-optic cable to Palau.”
This connects into the Coral Sea Cable System, a $130 million fiber-optic cable project linking Australia with Papua New Guinea and the Solomon Islands, for which Canberra contributed a large share of the total costs. These infrastructure projects are crucial for the digitalization of the Pacific islands’ economies, said Biswas.
Moreover, Australia remains the key security partner in the region and has extensive ties with the few Pacific-island militaries, as pointed out by Michael O’Keefe, the director of the Master of International Relations at La Trobe University. For instance, he said, Australia is still the Solomon Islands’ “partner of choice” in policing.
“Canberra has a treaty with Honiara that bankrolls the latter’s security, and this will not change overnight,” O’Keefe said, adding that “Australia’s successful military diplomacy has largely crowded China out of the South Pacific.”
Difficult balancing act
It seems that geopolitical competition in the region is currently taking place along certain areas of influence, with U.S. efforts focused on the North Pacific, primarily in the CoFA states, whereas Australia and New Zealand (as well as France and Japan) have been more focused south, said Dr. Anna Powles, a senior lecturer at the Centre for Defence and Security Studies at Massey University.
“All Pacific partners have recalibrated their policies toward the Pacific in recognition of both their waning influence and the need to reset their relations with Pacific states as these states have sought to engage with other partners, China included,” said Powles. “Relationships and trust are the currency of influence in the Pacific and the U.S. and its allies have frequently failed to invest in building and sustaining relationships.”
While no Pacific island country has yet to cut ties with their traditional Western friends to pursue a pro-Beijing line, some are increasingly concerned that they are being dragged into the Sino-U.S. geostrategic competition. Henry Puna, the Secretary-General of the Pacific Islands Forum (PIF), says he is worried about the region’s capacity to manage the dangers arising from the new and “complex geopolitical environment.”
In this regard, Herr pointed out that the heightened Western sensitivities to perceived strategic threats from China — given the country’s increased military capacity and greater determination to be respected as a “great power” — are likely to ensure that these island states “will be the meat in an Indo-Pacific strategic sandwich, probably in the near term.”
That said, analysts such as Zhang, O’Keefe, and Powles believe that the geostrategic competition could also provide new opportunities for at least some of these countries, such as Fiji, to leverage the regional dynamics for their own benefit. As a result, they emphasized the impact political decisions made by these island countries can have in shaping the geopolitical competition.
Powles argues that the Pacific island states are very much in the driver’s seat of their own foreign policy agendas, including when it comes to switching diplomatic recognition from Taiwan to China. The expert noted that while there is no doubt that Beijing has succeeded in a degree of elite capture — with the Solomon Islands and Kiribati being two recent examples — China has been unsuccessful in shaping the pandemic narrative in the Pacific as well as in its attempts to pressure Fiji into accepting Chinese vaccines.
At the same time, the analyst noted that the geostrategic competition in the Pacific is unlikely to wane, despite the reduced international activity in the region resulting from COVID-19-related travel restrictions.
“The economic fallout of COVID-19 and climate change will be two intersecting vulnerabilities in the Pacific that disruptive actors could seek to exploit over the coming years,” said Powles.
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