China targets new trade talks to expand power and influence in the Pacific
Friday, 24 March 2023
China is pushing ahead with new plans to maintain its power and influence in the Pacific despite the West gaining ground in the battle for dominance in the region.
The Pacific Islands Forum said some member states could start talks this year towards their first formal trade agreement with China.
The move comes amid the United States, Australia and United Kingdom reaching a defence and security alliance (AUKUS) aimed at showing a united front in the face of Chinese military expansion in the Indo-Pacific region.
Beijing has reacted with anger to last week’s deal in San Diego where the leaders of the US, the UK and Australia - Joe Biden, Rishi Sunak and Anthony Albanese formally announced the AUKUS pact.
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While the China-Pacific talks are expected to provide a boost to Beijing’s offshore economic ambitions and counter American influence in the region, experts said a potential pact was not expected soon.
Zarak Khan, the Forum's director of programmes and initiatives, said the idea of a trade deal with China was in its “embryonic stage”.
Khan said feasibility studies had been carried out, and forum members “are interested in getting more preferential market access for South Pacific goods.
“You can see that the Pacific is keen to sign, and the world is paying attention. We need to know what the appetite is from the Chinese side,” Khan said in a statement.
“The Pacific, for a long time, was neglected. Some people have said the Pacific was the hole of the Asia-Pacific doughnut, but discussions were happening on the periphery.”
Negotiations could span years, he said.
“China began gathering support for the world’s biggest trade pact – the Regional Comprehensive Economic Partnership – in 2012. That deal took a decade to hammer out.”
Khan said in the Pacific, China was seen as a source of aid to the islands' digital economies.
“I think our leaders have been transparent in telling their partners about the types of support that the Pacific needs,” he said.
China is renowned for its digital economy and this is of particular interest to the Pacific, Khan said.
“Some of the biggest companies in the world are operating in China, and we’re hoping they can share their capacity in terms of business-to-business exchanges with the Pacific.
“Pacific island countries, many impoverished and saddled by high costs because of their remote locations, have said they want foreign help that creates jobs, reduces the impact of rising sea levels and revives tourism that stalled during the Covid-19 pandemic.
“China is seen as a source of help setting up a digital economy in the Pacific,” Khan said.
The AUKUS deal will see Australia spending nearly US$250 billion (NZ$400b) over the next three decades for a fleet of US nuclear submarines with UK tech components - the majority of which will be built in Adelaide - as part of the defence and security pact.
Australia joins seven countries in the world to have nuclear-powered submarines China, India, Russia, UK, US and France.
Former Forum secretary-general Dame Meg Taylor said Pacific leaders need to pay closer attention to AUKUS, the Indo-Pacific Strategy and China's response to them.
She said the Pacific was sidelined in major geopolitical decisions affecting the region and the leaders “need to start raising their voices for the sake of their citizens.”
Khan said the proposed free trade agreement with China could slash import tariffs.
In a statement, a Chinese government official said Beijing was working on the joint free-trade feasibility studies with Fiji and Papua New Guinea.
A Chinese delegation is expected to attend a Pacific forum in July for economic ministers, Khan said.
“A China-centred trade pact would add to the Pacific Agreement on Closer Economic Relations Plus that was signed by 10 forum members in 2017 and ratified by three.
“Their deal covers goods, services and investment linked to the region’s wealthier, larger nations, Australia and New Zealand.
“The European Union has separate economic partnership agreements on trade and development with Papua New Guinea and Fiji. Samoa and the Solomon Islands intend to join these deals, according to the secretariat’s website,” Khan said.
He said Tonga, Tuvalu and Vanuatu were yet to sign.
“Since President Xi Jinping took office, the Chinese government has increased its diplomatic partnership with the Pacific.”
In May 2022, China signed 52 bilateral deals in trade, tourism and economic development with the Pacific.
But Beijing failed to secure defence and security pacts with the island states. The exception was Solomon Islands' Prime Minister Manasseh Sogavare who agreed to a deal with Chinese Foreign Minister Wang Yi in April 2022.
The agreement allows Sogavare to call on Beijing at anytime for assistance.
The prospect of any Chinese military presence close to Aotearoa and Australia was discussed at the highest levels in Wellington, Canberra and Washington.
A base 3000 kilometres from New Zealand and Australia would allow China to project military power into the Pacific Ocean and upend the long-standing strategic balance in the region, experts have warned.
“This potentially increases the risk of confrontation between China and the US,” one expert told Stuff.
Fisheries has been a huge issue for the Pacific, and some Forum members are seeking Beijing's help to process tuna catches.
Khan said Singapore and the US had expressed interest in their past trade agreements in the Pacific.
Founded in 1971, the Pacific Islands Forum includes Aotearoa, Australia, Cook Islands, Federated States of Micronesia, Fiji, French Polynesia, Kiribati, Nauru, New Caledonia, Niue, Palau, Papua New Guinea, Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu.