Australian Economy

China’s presence unleashes the economic potential of the Pacific Island countries

State Councilor and Foreign Minister Wang Yi arrived in Solomon Islands for a visit and was greeted by Foreign Minister Manele and his cabinet key members at the airport on May 26.

State Councilor and Foreign Minister Wang Yi arrived in Solomon Islands for a visit and was greeted by Foreign Minister Manele and his cabinet key members at the airport on May 26.

Chinese State Councilor and Foreign Minister Wang Yi’ commenced an eight-day visit to the Pacific Island countries including the Solomon Islands and then later Kiribati, Samoa, Fiji, Tonga, Vanuatu, Papua New Guinea and East Timor from May 26 to June 4. 

China states the goal of the trip is to further improve bilateral ties and expanding cooperation in various fields. When meeting with Solomon Islands’ Foreign Minister Jeremiah Manele, Wang reiterated the visit aims to strengthen communication with friends in Pacific Island Countries, enhance mutual trust, build consensus, deepen friendship and expand cooperation, adding that China-Solomon Islands relations have showcased strong resilience and vitality over the past two years. 

Manele said China has become a close friend and key development partner of the Solomon Islands, and all bilateral agreements have been effectively implemented, adding that China’s support has played an important role in the Solomon Islands’ efforts to develop economy, improve people’s livelihood and fight the COVID-19 pandemic, and has brought a great amount of employment to the country. 

The two sides also agreed to expand practical cooperation in a wide range of fields such as agriculture and fishery, timber, minerals, health and pandemic response, disaster mitigation and relief, and deepen exchanges of experience in product processing, industrial incubation and special zone construction, so as to help Solomon Islands improve its capacity for self-generated development and accelerate its industrialization and modernization.

However, the Western media continues to portray the visit as Beijing is reasserting its influence to win hearts and minds of the Pacific Island countries and focused solely on the security pact, exaggerating that such cooperation could spark a new Cold War between West and the China in the region. But it must be seriously noted that the reason why China’s presence is welcomed is that China can improve the livelihood of locals and unleash the economic potential of resources of local people in the rural Solomon Islands where the 80 percent of the population resides.

As China prepares to host its second summit with the leaders of Pacific Island nations in Fiji, intensifying China-US strategic competition is another challenge for Honiara. The Solomon Islands has so far been adroit in maintaining a balance between the two great powers but it may not be easy to sustain this going forward. As such, while Honiara continues to nurture ties with both China and the US, it should also think forwards and be prepared to make tough choices on certain specific issues in the future.

An outstanding challenge will be to strengthen internal institutional and organizational capacity in the Solomon Islands, a necessary step before the country can reap the benefits from the geostrategic competition. Already, it is a “weak state” and a diversified country on many fronts – including language, culture, ethnicity, etc. 

It is likely that traditional donors will further step up engagement with the Pacific region in the wake of this deal. From Australia’s perspective, the Solomon Islands will receive more of Canberra’s attention. For example, the Labor Party pledged that if they form a new government, they will boost Australian aid to the Pacific by half a billion Australian dollars during their election campaign in late April. 

Alarmed by the security pact, the US is expected to enhance their diplomatic, aid, and economic relations with Solomon Islands in the near future. Back in 2019, the Solomon Islands parliamentary taskforce established to provide advice to the government on whether to switch recognition from Taipei to Beijing criticised the US for its neglect on economic development in the Solomon Islands. The US proposal to re-open its embassy in Honiara will play a big role in facilitating this engagement process.

The author is Policy Consultant at the Foreign Policy Advisory Secretariat of the Solomon Islands Government. 

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