Sink or swim: Chinese port plans put Pacific back in play
By Jonathan Barrett
ASAU, Samoa (Reuters) - Early in the morning, before sunrise, low tide on the Samoan island of Savai'i reveals the remnants of an old American airstrip, washed away by decades of erosion, cyclones and tsunamis.
The World War II site in Asau, which also hosts a 1960s-era concrete wharf in its well-protected natural harbour, is being considered for a new port to be developed by China, according to the Samoan government and the area's highest ranking chief, Masoe Serota Tufaga.
The proposed construction of a facility that could be turned into a military asset in hostile times has worried the United States and its regional allies, which have dominated international influence in the vast waters of the South Pacific since 1945.
Sitting at his coconut and cocoa plantation on the hills above the port site, Tufaga told Reuters he would abide by any government deal for a Chinese-developed port even though he was concerned about Beijing's growing influence.
"The government and China came here to look at it - they offered it," said 71-year-old Tufaga, who has the final say over land-use agreements affecting Asau.
"If China wants to operate this, it's too hard for us to say to the government, no, we can not allow China here. The people are looking for some jobs.
"That's right - it's money. It's money."
The United States, and allies including Japan, Australia and New Zealand, are actively expanding their diplomatic postings in the Pacific to counter China's influence, and warning island nations that Beijing-funded projects needed to make financial sense.
China is using "predatory economics" to destabilise the Indo-Pacific and the United States is working with its partners to address the region's pressing security needs, U.S. Defence Secretary Mark Esper said in Sydney on Sunday.
Beijing has said its assistance is welcomed in the Pacific and Chinese President Xi Jinping told a regional forum last year that his country's lending activities were not a "trap".
"Before loan projects are approved, China conducts strict economic and technical evaluations, and fully considers recipient countries' debt sustainability and repayment capabilities," China's foreign ministry said in a fax. It said it was not aware of the specifics of the Pacific island projects.
Though tiny in land mass, Pacific islands control vast swaths of resource-rich ocean called Exclusive Economic Zones, forming a formidable boundary between the Americas and Asia.
During WWII, American and Allied forces were able to halt the advance of the Imperial Japanese Army at a number of key battles in the South Pacific, helping turn the tide of the war.
Each Pacific state also represents a vote at international forums such as the United Nations, and the region is home to more than one-third of the nations that recognise Taiwan as a sovereign entity, to the chagrin of China.
The potential Chinese development of Asau, or a Beijing-funded port at a second potential site called Vaiusu, threatens to spark a waterfront contest in the world's largest ocean.
Japan has just invested billions of yen expanding Samoa's only existing commercial port, Matautu, and is building a bridge connecting the wharf and industrial precincts.
Isao Kishi, Counsellor and Deputy Head of Mission at the Japanese embassy in Samoa, said Japan contributed to the Pacific, and the expansion of the port, to improve peace and stability.
"Japan is surrounded by oceans and we are very indebted to the oceans," said Kishi. "We are very interested in keeping order in the region."
While the United States and its allies have historically been the predominant power in the Pacific, China also has long-standing ties with many islands.
Samoa recognised China in 1976 and a strong history of migration means around one-sixth of the island nation's 200,000 residents are of mixed Samoan and Chinese descent, according to census data.
Prime Minister Tuilaepa Sailele Malielegaoi has been a strong supporter of Beijing, last year saying Pacific states had themselves to blame for their debt problems and describing criticism of China's lending as patronising.
He told Reuters he would not allow geopolitical fears to stifle development of much-needed infrastructure and said Samoa would "follow our own line of thought", not that of the United States and its allies.
"Their enemies are not our enemies," Malielegaoi told Reuters at his office in the Samoan capital, Apia.
"We have never spoken about any military thing; all we are interested in is our own wharf for ships that bring the goods in that we need and fishing vessels that might come in to take our fish overseas."
Malielegaoi, who competed in archery at the recent Pacific Games, said even local Chinese investment in stores was helping Samoa become more competitive.
"If you want to compete with the Chinese you yourself need to do what they are doing, go and copy," he said.
IDLE PORTS, DESERTED RUNWAYS
In fellow Pacific nation Vanuatu, a $54 million repair and upgrade to Luganville port facility, funded by Export–Import Bank of China, has also caught the attention of Western allies.
The development includes a 360m (1,200 foot) wharf for large vessels. But the number of cruise ships docking in Luganville has declined since the overhaul was completed in 2017, according to analysis of Vanuatu's budget documents, creating an extra debt burden and no additional income.
Vanuatu and Samoa are two of seven island nations in the South Pacific that owe significant debt to China. Nearby Tonga gave up the hosting rights to the recent Pacific Games to Samoa because of the strain on its finances.
One island country unable to meet its loan conditions, Sri Lanka, handed China a long-term lease over the strategic Hambantota port in 2017 to pay down its debts.
Costly maintenance of under-utilized infrastructure is a problem for small Pacific economies which have been falling further into the red over the past decade.
Reuters visited two airfields on the island of Savai'i - Maota and Asau - which despite not being operational, were being maintained to stop the jungle from reclaiming the land.
Opposition lawmaker Olo Fiti Vaai said Samoa risked being pushed into the hands of its creditors if it built more burdensome infrastructure.
"Airfields and wharfs are expensive to maintain," Vaai said. "If we build more infrastructure that we can't make money from, we don't know how we are going to pay back the Chinese government."
Reuters' analysis of Pacific nation budgets has found China increased its concessional loans over the past decade from almost zero to become the largest financier in the Pacific, bankrolling everything from ports and airports to sports stadiums and boulevards.
In response, Australia has channelled additional aid to remain the Pacific's biggest donor and announced a new military unit dedicated to training and assisting Pacific allies.
Chinese flags have festooned Beijing-funded infrastructure around the Pacific, an issue that triggered criticism in Samoa early this year.
At July's Pacific Games in Samoa, China's five-starred Red Flags had largely been removed.
The founder of one of Games' major sponsors, Shanghai-based Legend Sportswear, said China's involvement in Samoa was purely commercial, and now more subtle.
"They keep a low profile – I’m the only one with a Chinese flag," said Tan Kek Looi while watching the Rugby 7s tournament.
"The Chinese government do things on the low-key," said Looi. "China has never conquered a country. It has been a commercial country."
ALL AT SEA
Alison Stuart, division director of small states for the International Monetary Fund's Asia Pacific department, said many Pacific countries needed financing to address large infrastructure gaps and to build resilience to natural disasters.
"At the same time, susceptibility to shocks and large development needs also mean that these countries can be vulnerable to a rapid buildup of debt burdens," Stuart said in a written response to Reuters' questions.
Chinese loans account for almost 40% of Samoa's total external debt of 1.05 billion tala ($386.5 million) making Beijing easily its single biggest creditor.
Samoan lawyer Unasa Iuni Sapolu heads a new political party that plans to ban Chinese migration and says the island nation risks losing its sovereignty if it does not change paths.
"For a number of years, money has been dangling in front of our peoples' face, in front of our peoples' eyes, so we could fall for the flash buildings we have - it's costly," said Sapolu.
Store-owners at Apia's waterfront told Reuters they were concerned about China's growing influence over the country's finances, and feared local Chinese-run shops undercutting prices.
In Asau, village chiefs have barred Chinese-run shops over fears they will push out local businesses.
But Tufaga said the area was in desperate need of jobs and the port required significant investment to clear coral choking the entrance.
"Who else will do it?" he said. "We are waiting for China to extend the harbour for the big ships to enter."
($1 = 2.7167 tala)
(Reporting by Jonathan Barrett in SAMOA; additional reporting by Jill Gralow, Colin Packham, Tom Westbrook and Michael Martina; Editing by Lincoln Feast.)