China Reclaims Influence as Top Donor in Pacific Islands

China has reclaimed its position as the second-largest bilateral donor to the Pacific Islands, surpassing the United States. Following a pandemic-induced lull, China increased its development support by 6% to $256 million in 2022. This strategic move aims to enhance its influence in the region.

In a strategic maneuver, China has reclaimed its position as the second-largest bilateral donor to the Pacific Islands, as reported by the Lowy Institute. The nation has surpassed the United States, focusing on projects that enhance its influence across the region.

The Lowy Institute's Pacific Aid Map reveals that while overall development finance declined by 18% in 2022, China's support surged by 6%, totaling $256 million. This comeback follows a lull during the pandemic, as Beijing adopts a more politically targeted aid strategy and employs new aid modalities, including direct government budget transfers.

China's increasing involvement in infrastructure, reflected in its announcement of a $135 million Vanua Levu Road Upgrade in Fiji, has sparked apprehensions about "debt trap diplomacy." Meanwhile, Australia remains the top donor, surpassing multilateral development banks.

(With inputs from agencies.)