China Power Play in the Pacific

 

China is undoubtedly one of the biggest country in the world but there are concerns that it wants to get bigger. Chinese activity in the pacific has never been so vigorous then the past two decades up until today. Although, China has always had a presence in the South Pacific. Ethnic Chinese have resided in the region for centuries, running some of the region’s oldest trading businesses such as George Seeto and Tang Mow stores in Wewak, East Sepik Province as well as Seeto Qui and Lae biscuit company in Morobe Province. Even though China’s engagement with Papua New Guinea (PNG) spans centuries over, the last two decades China has been steadily building its influence in the South Pacific. Since the World War 2, the Pacific has largely enjoyed a benevolent status on the geopolitical stage. This has all changed with China’s growing presence in the region. With this growing presence, it presents threats as well as opportunities for PNG and the Pacific to tap into the burgeoning economy of China for some benefits.  And so, what is China’s real ambition in the South Pacific after all, and what risks does this create for the region?

In the past five years, China’s shadow in the South Pacific has become increasingly large, and its behaviour in other parts of the world so much more assertive and threatening like taking over the Scarborough shoal from the Philippines in the South China Sea. There has also been certain facts pointing to Chinas ‘Blue Sea 2020’ Policy that is aimed at enhancing marine environmental protection for China (Xinua News Agency 2020). However, as reported by the diplomat, “law enforcement activities conducted under the initiative would involve coastal and sea patrols, as well as remote monitoring capabilities” (YingHui Lee 2020). This presents a grim possibility that the initiative could be used by China as yet another justification for the increased presence of Chinese law enforcement vessels in Pacific waters.  Traditionally, the Pacific islands only play a marginal role in Chinese geostrategic thinking simply because they are small states far afield geographically in comparison with China. Yet, during the context of China’s rise and the changing architecture of international politics in the Asia-Pacific, the geostrategic importance of Pacific islands, in line with the significant economic implication has become increasingly pronounced accordingly.

Given that the Pacific islands spreading across the central and southern parts of the Pacific Ocean, which are located in the sea route between China and South America, Antarctica, as well as Australia and New Zealand, China’s strategic cooperation with Pacific island countries therefore has become a major concern in order to safeguard maritime security, especially in the context of rising trade and shipment across the aforementioned sea lanes. Also, the Pacific islands serve as a so-called “second island chain” by the US seeking to restrain the global freedom of manoeuvre by the Chinese People’s Liberation Army Navy (PLAN). Therefore, the close strategic cooperation with islands states is presumed to help undermine the US blockade along with the further development of Chinese blue navy project. Third, due to the uncertainty of mutual relationship across the Taiwan Strain, the diplomatic tug of war between Taiwan and mainland China for winning the hearts and minds of the island countries may happen again.

China, therefore, has remained to pay high attention to the Pacific island countries. Finally, the power competition between China and US in the Pacific islands under the backdrop of China’s rise and America’s “pivot to Asia” is unavoidable. However, it is not so much a hard as a soft balancing in the South Pacific. Above all, from the perspective of China, in addition to the economic importance, the geostrategic significance of the Pacific islands has loomed large, and it has been suggested that a long-term strategy in this regard should be taken into serious consideration.

With latest twist and turn of events in PNG, it seems that China is finding it difficult to keep a strong influence over PNG. A recent change of political regime in PNG, there seems to be a shift away from China in comparison with the previous government. Around September 2012, immediately after Peter O’Neill was installed as the Prime Minister, he (O’Neill) took a huge delegate to China, organised by his sidekick, Ni Cragnolini a naturalised PNG citizen of stature in the top notch business circles of PNG of Chinese origin. It was openly reported that a loan of K6 billion was obtained from the Chinese Export-Import Bank (Exim Bank) to fund certain rehabilitation of ailing infrastructures such as PNG Power Ltd among other state owned enterprises. One would have thought that PNG Power’s rundown and incompatible power generation and distribution equipment would be first priority which was not so. Instead, the K6 Billion was never appropriated in the 2012 National Budget, nor was it captured in the subsequent budgets in 2013, 2014 and 2015. No one really knows whether that loan was obtained and if so, did the money ever entered PNG?

One of the mandatory conditions of Exim Bank loans is that a Chinese multi-national corporation, mostly State owned enterprises, has to be nominated to deliver the projects identified by the recipient country. Under this arrangement, the funds remain in China. Only the project is delivered to the recipient country. The recipient country then repays the loan with concessional interests to Exim Bank. It now appears more clearly that the Exim Bank loan of K6 Billion was actually signed and procured illegally –without the mandatory Parliamentary approval. It is believed that this is one of those so called “off balance sheet debts” that Department of Treasury is repaying. With the culminating and incriminating evidences piling up caused public alarm as citizens eventually lost confidence in the O’Neil-Abel regime and pulled out their support as they elected few leaders such as Brian Kramer, Madang open Member of Parliament (MP) who was one of the most vocal MP against corruption in the country and was instrumental in the toppling of the O’Neil regime and the subsequent forming of the new Marape-Steven government. 

The Marape government came into the political scene with a strong stance toward eradicating corruption at all levels in the country. With the change in government, there came with it many political reforms because of the power shift along with a catch phrase in ‘Taking Back PNG’ adopted by the Marape-Steven government from the Oro governor, Garry Juffa who made a lengthy speech toward fending off the likes of China and protecting the sovereignty of the country at all costs. The famous rhetoric in taking back PNG would then be used as a figurative compass of an ambitious vision to transform PNG, to become the ‘richest black Christian nation in the world’ in which the new government conjured up goals, one of which was to change certain laws in order to protect and provide for its citizens substantially in order to see this vision fulfilled.

Some back to back developments clearly suggest that PNG is having a fallout with China. In 2019, an Australian funded study ordered by PNG’s National Cyber Security Centre had revealed that a Huawei-built data centre in Papua New Guinea is seen as a ‘failed investment,’ after the technical review found serious security vulnerabilities in what was designed to be an important piece of PNG’s digital infrastructure. Dated encryption technology and the placement of some devices in the centre meant that ‘data flows could be easily intercepted,’ according to a review commissioned by Papua New Guinea’s National Cyber Security Centre. Timothy Masiu, member for Bougainville south electorate whose portfolio also includes information technology, said the National Data Centre, funded via a loan from China's Exim Bank, had not delivered what was promised. "It barely works," Mr Masiu said. "It's a failed investment. We may just have to shut it down." (Australian Financial Review, 2020).

The data centre was financed by a US$53-million loan from the Export-Import Bank of China and designed by engineers from Huawei Technologies Co. Ltd. Its deficiencies have renewed questions about the trustworthiness of Huawei technology at a time when Ottawa and other Western capitals are mulling whether to allow equipment from the Chinese company in 5G networks. Minister Masiu further cautioned against geopolitical point-scoring over digital infrastructure. The United States, the U.K. and Australia have to varying degrees banned Huawei’s 5G technology. Recently an article from post courier reported again a statement by Minister Masiu that “up to 150 PNG nationals which include high ranking government officials and personnel’s including politicians, police officers and the country’s key strategist are among those whose personal data are on the database of Chinese Data Analytics Company, Zenhua Data” (Post Courier, 2020). Now the PNG government is refusing to pay back the 53 million dollar loan on the basis that China was using the data centre to spy on the affairs of PNG.

A month ago in August, there was a major controversy after a Chinese state-owned company, the China Metallurgical Group Corporation (MCC), which controls Ramu Nickel Mine, a major nickel mine in Madang Province said that 48 of its staffs who returned from China earlier in August may test positive for COVID-19 because they have been vaccinated. No COVID-19 vaccine has been found till now and therefore it became clear that China was using PNG as a laboratory for live testing of its substandard vaccines. PNG has managed to keep the Chinese virus at bay and therefore the vaccine controversy came as a major provocation, which PNG responded by blocking the Chinese flight carrying 150 workers on board due in Port Moresby (Daily Mail UK, 2020). Just 4 weeks ago, PNG defence force maritime navy intercepted what has come to be described as a suspected Chinese vessel. The unregistered ship was found to be illegally operating in PNG waters between Kavieng and the strategically located Manus Island where the joint Lombrum Naval base is being developed by the US and Australia to contain the expanding Chinese influence in the Pacific. EMTV news stated that sources from the Lombrum Naval Base said 8 crew members of the unnamed vessel, have been detained, one of whom is currently admitted at the Kavieng, general hospital, after receiving gunshot wounds (EMTV, 2020).

Even before the controversial strife’s with China, there is currently an ongoing legal battle with a major Chinese mining company which had been operating the Pogera Mine for the past 30 years and had been denied an application to extend the lease on the Pogera Gold mine, which is operated by Barrick Niugini Limited — a company jointly owned by Canadian miner Barrick Gold and China's Zijin Mining Group. The ABC obtained a copy of a letter sent to Prime Minister Marape from the chairman of the Zijin Mining Group, Jinghe Chen which states some sentiments as well as a clear warning that, "if Zijin's investment in Porgera mine is not properly protected by the PNG Government, I am afraid there will be significant negative impact on the bilateral relations between China and PNG, which is something we definitely do not want to see” (ABC News Australia). This clearly shows a major fallout between China and PNG that has now accelerated further.

As mentioned, James Marape was elected on a pledge to take back PNG’s resources and it is highly unlikely that he will make it easier for China to push PNG around like it did to Solomon Islands, Vanuatu, and Kiribati.  It is clear what China’s motives really are based on compelling evidences around the world, in the Pacific region, and especially in PNG where it is trying to push forward its strategic policy of trapping nations in debt and then occupying or claiming land and resources in that country after failure of repayment overtime. Widely known around the world as debt-trap diplomacy, China has been engaging robustly in implementing this policy in impoverished nations. However, Australia cannot afford to lose PNG and therefore Prime Minister Scott Morrison is making all attempts to close off China. Australia and the United States of America (USA) have come up with a joint initiative to, “support the redevelopment of Lombrum Naval Base and build the PNG Defence Force’s capability to protect its borders and maritime resources through a broad program of mentoring, tailored training, and infrastructure development at the PNG Defence Force base”.

On the other hand, it seems China is not giving up. PNG can be a hard place to operate. As the Australian government and many businesses and NGOs have found, success requires sustained effort with multiple stakeholders. Chinese companies are not giving up. China Mobile reportedly looked at taking over domestic mobile carrier Digicel earlier this year, and Shenzhen Energy is persevering with its stalled US$2 billion “Ramu 2” hydro power project, given initial approval by the O'Neill government in 2015. A deal has also recently been signed allowing PNG seafood exports to China. China has every right to pursue investments in the region, and PNG is entitled to diversify its external links. China will likely make further advances, but on current form these will likely be more opportunistic than strategic. Australia should engage China positively in PNG, consistent with its bilateral interests in both Port Moresby and Beijing. It should also build confidently on the advantages that flow from geographic proximity and a long, overall positive relationship with its friends across the Torres Strait such as the joint Declaration of Principles Guiding Relations Between Australia and Papua New Guinea in 1987, as amended by exchange of letters 1992.

In conclusion, I strongly believe that China is trying to take over countries because of its economic might. In an era where nuclear armaments are only put on display as a form of psychological warfare, nobody would really want to use these warheads no matter what happens because it will obviously wipe out the human race as we know it. And therefore, China may be engaging in a new kind of warfare that involves strategic use of its economic might to take over, control, and harvest resources from debt trapped countries to satisfy its huge appetite for it. PNG however has a strong ally in Australia but it all boils down to what kind of leadership the country has, because with experience as discussed in this essay, we have seen that the country was almost sold off and steeped in debt because of only one foolish leader’s actions. For PNG, we can use these tug of war between superpowers to our advantage in getting free infrastructures and developments like the one occurring in Manus instead of getting loans to build such things.  PNG has a strong sense of national sovereignty and we wield it pride fully and liberally. While PNG may be willing to with China in certain United Nations votes, it is a long stretch of the imagination to believe that PNG would be so willing to hand over a military base or outpost that would so rapidly undermine the sovereignty that they viscerally protect. A positive outcome from this dilemma is that the West is now paying attention. Australia, in particular, is forcing China to be more than just opportunistic in their ambitions because of the scaling up of its own efforts — both in money and in attention — devoted to the South Pacific and especially in its close neighbour in PNG.