Development, Government and governance | The Pacific

27 August 2020

China’s development interests in Kiribati is causing strategic concern in the US, but Kiribati sees the benefits for climate adaptation and tourism, writes Christopher Pala.

The proximity of Kiribati’s eastern atolls to US territories, and its huge maritime claims rich with tuna, is luring foreign investors to the Pacific island country. China in particular is showing an interest in Kiribati, but this has left some Western nations – and Taiwan – concerned that their influence may be waning. So far there are no new tuna deals since the diplomatic switch to Beijing, but new tourism infrastructure is being discussed.

However, with this increased interest from China come concerns about the nature of the country’s engagement. There is some evidence to suggest that Chinese loans can add to the debt burden of smaller countries. In some cases, the assets funded by Chinese investment become showpieces that are not well suited to place, or in the case of infrastructure with more utility there is rarely provision for maintenance. Even so, Pacific island countries often welcome the access to additional financial and investment opportunities.

In an email exchange with me, Kiribati President Taneti Maamau was dismissive of concerns about debt. “My government has no intention to acquire large loans from any country in the near future,” he asserted, echoing statements he made during his presidential campaign.

It helps that Kiribati is in a more advantageous position than many other small states. It has a sovereign fund of close to a billion Australian dollars – the country’s currency – and a long record of thrift, notably under former President Anote Tong, Maamau’s predecessor.

On Chinese engagement, Maamau needs to move with some caution. Despite recent moves to re-embrace China by the president, public opinion in Kiribati is a mix of suspicion and welcoming of China. A controversial photo of China’s Ambassador there went viral recently. While the Kiribati government formally recognised Beijing over Taipei in September 2019, there are still many in the Pacific island nation that favour Taiwan. Shortly after the abrupt diplomatic switch was announced, opposition demonstrators waved Taiwanese flags and chanted “We love Taiwan, we hate China, we want peace,” Radio New Zealand reported.

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The United States, though it gives little direct aid to Kiribati and diplomatically covers the country from Fiji, also remains popular with many in the country. US-based Protestant churches have large followings and memories of US liberation from the Japanese in World War II persist.

“Anywhere beyond the second island chain (Japan to Papua New Guinea), we have huge advantages,” said Gregory Poling, an Asia expert at the Center for Strategic and International Studies, when I spoke to him recently.

But while the US remains welcome, like other Pacific island countries, Kiribati’s frustration may be increasingly over the lack of US aid and infrastructure support, or their inaction on climate change.

Kiribati sees advantage in diversifying its mix of development partners, including China and New Zealand. Because the country is strategically located 2,160 kilometres due south of Honolulu, it could offer Chinese ships a potential refueling stop in America’s backyard.

“If Beijing can establish a string of naval bases across the South Pacific, it will drive a wedge between the US and the other members of the Quad,” says James Fanell, a former head of intelligence for the US Pacific Fleet, referring to the alliance between US, Australia, India and Japan.

Not only is Kiribati in a geographically strategic location, it also has valuable infrastructure with the potential for investment. Kiribati’s Christmas Island (not to be confused with the Australian external territory of the same name), known in I-Kiribati as Kiritimati, hosts an incongruously high 90-metre pier built by the Japanese in 2000 on the northwest coast for the aborted Hope-X space shuttle retrieval project. It meets Christmas Island’s current needs, but could easily be lengthened to accommodate cruise ships and aircraft carriers alike.

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Christmas Island also has a spare runway, Aeon Field, built by the British in the 1950s for its nuclear testing program. And its ample lagoon could be dredged to make a deep-water port that, unlike the oceanside pier, could shelter ships in bad weather.

While the Chinese may have interests in deep-water port facilities, President Maamau is committed to developing tourism, with Christmas Island as an obvious candidate. Notably, it offers the closest atoll experience to Hawaii and its 10 million visitors a year. Paul Kench, an Australian geomorphologist who knows Christmas Island well, told me that there are numerous pristine beaches, fish-rich corals and spectacular dive sites. What the island lacks is world-class hotels and resorts. That could change with President Maamau offer of tax free zones and “high end” tourism partnerships announced in a press release this week.

In our interview, Maamau said Kiribati is hoping to “work with industry leaders from China” to “provide world-class tourism facilities in the very near future” in the Line Islands, which includes Christmas, as well in the Gilbert Islands and Tarawa, the capital island. These would include world-class hotels, he wrote, but “there was never any intention or plan by this government to allow China an accessory base in Christmas.”

China’s interest in Christmas Island was evident during a Belt and Road Memorandum Of Understanding signing ceremony in Beijing, where the island’s representative, Mike Temari, is seated directly across from China’s President Xi Jinping.

“Building a port to service tourism at Christmas Island could make sense,” said Fanell. But if Chinese fishing fleets start using these facilities, he adds, “it’s not hard to imagine that someday, their navy could also use them and challenge American or Australian ships transiting though Kiribati waters, which could be a big problem in case of a conflict with China over Taiwan.”

However, Mike Taylor, a retired cruise ship captain, didn’t believe Christmas Island has enough to offer cruise ships to offset the cost of a deep-water port. “It’s not ideal for the mass tourism market,” he said.

“A dual-use facility like a deep-water port that makes no economic sense would be a red flag for the United States,” said Poling.

Significantly, such a development would violate an obscure Treaty of Friendship signed with the US in 1980, under which Kiribati agreed not to let third countries build facilities without Washington’s assent.

However, Poling said that for the US government to invoke the treaty to stop the port’s construction would be a big mistake.

“They would be accused of blocking economic development in a small, vulnerable country for selfish reasons,” he said. “Instead, they should say, let us do it… You don’t want to come in and look like a bully, you’ve got to come in with a positive offer.”

In the Central Pacific, he said, “There’s no area where the US doesn’t have a prohibitive advantage, and the only way you could lose it is by neglect.”

There’s evidence that Kiribati is feeling in need of more attention for exactly that reason. With the advent of interest from China, the island nation is using its new leverage just like other nations in the region are doing.

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