China & Papua New Guinea

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Starting with how Australia views closer CN - PNG ties.


Why is China cosying up to our nearest neighbour?

http://www.abc.net.au/radio/programs/the-signal/china-power-png/9676068

John Howard once described Papua New Guinea as our “patch”. So why is China splashing cash in our back yard and what's in it for them?

Beijing is now outspending Canberra in aid and gifts to PNG and a worried Malcolm Turnbull has enlisted the UK's help.


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Australia uneasy over Chinese influence in PNG amid increasing infrastructure investment
By Papua New Guinea correspondent Eric Tlozek
Posted 11 Feb 2017, 6:02pm

http://www.abc.net.au/news/2017-02-12/australia-uneasy-over-chinese-investment-and-influence-in-png/8263384

The $260 million Edevu Hydro Project is a private development, but PNG Government ministers say it is being funded by the China Development Bank.

The project is one of several major infrastructure developments in PNG funded or built by the Chinese Government.

PNG projects funded by Chinese loans
Port Moresby roads: $102 million
National Broadband Network: $67 million
National Identity Card register: $63 million
Government Information Systems: $60 million
Kokopo town sewage: $28 million
Pacific Marine Industrial Zone (Madang): $14 million

"It will be a development for the local economy," China's ambassador to PNG, Li Ruiyou, said at the launch.

"It will be beneficial for the local people and it also will be a promotion for the cooperation between the two countries."

Australia's defence and diplomatic community are privately expressing unease about China's growing influence in Papua New Guinea, where the Chinese Government is investing billions in infrastructure and business development.

Chinese Government companies are building roads in the highlands and to the Lae airport, and redeveloping Lae's port.

The Chinese Government has also lent the PNG Government hundreds of millions of dollars to build roads in Port Moresby, create a National Broadband Network and a National Identity Card system and develop a system to share information between government departments.

Unlike Australia, which delivers its aid primarily through grants to specific programs, China delivers its aid via concessional loans.

PNG's budget documents show the cost of servicing and repaying its debts to China has risen more than tenfold — from $2.46 million to $26.2 million annually — in the past five years.

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Australia should not fear Chinese influence in Papua New Guinea, Government says
By Papua New Guinea correspondent Eric Tlozek
Updated 22 Jan 2018, 11:47pm

http://www.abc.net.au/news/2018-01-23/australia-should-not-fear-chinese-influence-in-png/9349140

Key points:
- Australia's International Development Minister questions Chinese projects in the Pacific
- PNG says Australia should not fear China's influence in the Pacific
- China fills the gap after Australia's investment in PNG stagnates

The Australian Government is becoming increasingly alarmed about Chinese investment and aid — usually in the form of concessional loans — to developing countries on its doorstep.

But Papua New Guinea's Foreign Affairs Minister, Rimbink Pato, has moved to reassure Australia that Papua New Guinea can manage its relationship with both countries.

"Papua New Guinea remains a close, reliable and trusted friend of Australia, we'll work through all the issues of concern together," he said.

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From last year

Australia bankrolls Papua New Guinea APEC summit costs, stymies China
Exclusive by national affairs correspondent Greg Jennett
Updated 31 Jan 2017, 6:04am

http://www.abc.net.au/news/2017-02-01/australia-bankrolls-png-summit-costs/8228208

Australian taxpayers are on track to pay at least a third of the costs of Papua New Guinea's ambitious plan to host next year's APEC summit to stave off rising Chinese influence in the poverty-stricken nation.

Key points:
Summit will swallow the equivalent of one-fifth of Australia's total annual aid budget to PNG
Government is persuaded any retreat will risk China filling the breach
"We stand by our friends when they need assistance," Michael Keenan says

Confirmation this week that 73 Australian Federal Police (AFP) officers will remain in PNG until the end of the November 2018 leaders' meeting marks the beginning of a series of commitments covering security, diplomatic support, advisory roles, intelligence services and immigration processes.

The ABC has been told the AFP commitment of $48 million together with other contributions in cash and kind will exceed $100 million before the summit is held, swallowing the equivalent of one-fifth of Australia's total annual aid budget to PNG of $558 million.

The deepening financial exposure to PNG's expensive APEC showcase has generated debate at the highest levels of the bureaucracy and across the ministry over its affordability at a time when Australia's own budget is mired in deficits for at least the next four years.

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Papua New Guinea faces cash crunch as China repayment schedule ramps up
Jonathan Barrett and Charlotte Greenfield

https://mobile.reuters.com/article/amp/idUSKBN1Y30B9

SYDNEY/WELLINGTON (Reuters) - Papua New Guinea's annual debt repayments to China are forecast to increase 25% by 2023, new budget figures show, at the same time as the Pacific nation falls to its largest ever deficit.

The resource-rich archipelago, which is at the center of a diplomatic tussle between China and the United States, has blamed extravagant spending by the previous administration for its souring finances, which will require the government to borrow even more to pay the bills.

Balancing its books has been made more difficult by recalculations to the country's outstanding debt. It has soared 10 percentage points since the last annual budget to 42% of gross domestic product (GDP), above the legal limit of 35%.

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