Little Red Podcast

Bitter Medicine: China’s New Pacific Frontier4 min read

Is China the new imperial power in Papua New Guinea? – Louisa Lim


In shops across Papua New Guinea, Chinese shop-owners perched on high chairs watch over local shoppers to guard against theft, checking their bags before they are permitted to leave the premises. This striking act of physical dominance is symbolic of the distance between Chinese migrants and locals, according to journalist Jo Chandler, who has reported extensively from the Pacific nation: “There’s a real separateness about Chinese enterprise which is above and removed from this population.” The complicated tensions unleashed by Beijing’s growing role in the Pacific are pitting political elites against ordinary people, with sporadic explosions of violence targeting Chinese communities.

Chinese migrants – an estimated 90% of whom are from Fuqing in Fujian province – now control most of the retail trade in the largest nation in the Pacific. For local political elites, China’s contribution towards economic growth and infrastructure development has been overwhelmingly positive. To Prime Minister Peter O’Neill, the link is clear: “The success of Papua New Guinea’s growth in its economy over the past fifteen years has largely been contributed to by the Chinese government and the Chinese businesses. That is why we want to continue to expand on it.” That open-armed embrace of Beijing has included three more huge infrastructure deals, concluded in late 2017 under China’s One Belt, One Road scheme.

O’Neill’s unbridled sense of gratitude to China is not universal. Indeed, Papua New Guinea (PNG) has seen sporadic – and sometimes deadly – anti-Chinese riots over the years, while Beijing’s burgeoning role in the Pacific has recently raised the alarm in Canberra. In January, Australia’s Minister for the Pacific Concetta Fierravanti-Wells accused Beijing of building “white elephants” and roads to nowhere, leaving nations saddled in debt.

Beijing’s track record in PNG is spotty at best, with a largely China-funded port expansion at Lae blowing over budget by $170m, while another project – the Pacific Marine Industrial Zone, which is being built by a Chinese contractor with a $156m loan from China’s Exim bank – recently hit headlines for spending US$1m on a single gate. Add to that the bitter resentment sparked by projects which bring in Chinese workers instead of using locals, an unpopular decision given high unemployment rates.

The Australian National University’s Graeme Smith, who studies Chinese investment in the Pacific, says weak corporate governance and a culture of corruption have collided in PNG: “Typically what you get is collusion between the Chinese company and a PNG politican, so projects are designed in a way that is less than ideal – a couple of PNG individuals and a company that is interested in inflating their prices as much as possible.”

One case in point has been the collapse of the country’s healthcare system, which once depended on Australian-funded aid posts dispensing primary healthcare in remote regions. When the contract was put up for tender, it was won by a local company linked to a Chinese supplier notorious for counterfeit drugs. Concerns about corruption and sub-quality drugs led to the withdrawal of Australian funding with dire consequences. “In remote locations you can come across an aid post where there’s literally nothing,” says Chandler. “It’s been shut down and the community health worker hasn’t been paid for months. And they’re not providing any care.” In a country with the world’s worst drug-resistant tuberculosis problem and mortality rates equivalent to sub-Saharan atmosphere, the consequences have been deadly.

For PNG’s political elite, Chinese overtures have also been welcomed as a useful foil against Canberra. “It gives the [PNG] political elite a choice – a choice they haven’t had in the past,” says Smith. “In the past, they’ve often had to genuflect to Australia as the former colonial power. China being present gives them options in that if they want something done or something built, if the Australians won’t do it, they can say we’ll go to China. And that always gets a reaction in Canberra.”

Beijing’s proxy force of shopowners, small businessmen and construction workers could just be the first wave of Chinese influence. The geostrategic opportunities offered by Papua New Guinea and the willingness of its political elite to play ball could open the way for Beijing to exert itself in other far more overt ways in future, according to Smith. “The game is changing when it comes to China,” he says, “If you put it to me 10 years ago, I’d have said that China’s not interested in building bases. Now I think it’s a distinct possibility in the next five to ten years for China to build bases in the Pacific.” ∎

This essay is a companion piece to this week’s episode of the Little Red Podcast, hosted by Graeme Smith amd Louisa Lim and distributed by Chinoiresie at Australian National University.
Header image is Maris Pacifici by Ortelius (1589), one of the first printed maps to show the Pacific Ocean, from Wikimedia Commons.