Analysis-No clear winner in U.S., China contest in the Pacific

Illustration shows U.S. and Chinese flags

By Kirsty Needham

SYDNEY (Reuters) - The United States opened international aid offices in the Pacific Islands this week, bolstering support for the strategic region and pitting it more forcefully against China, which has been providing infrastructure loans to the area for years.

The vast ocean region, pivotal in World War Two, is in the spotlight again amid tensions over Taiwan. Taiwanese officials this week said China, which claims the island as its territory, could launch military drills soon to intimidate voters ahead of an election next year.

On Wednesday, a Chinese military delegation joined a U.S.-hosted conference of two dozen international defence chiefs in Fiji, highlighting the region's importance to both superpowers.

At the same time, USAID Administrator Samantha Power visited the two biggest Pacific Islands nations, Papua New Guinea and Fiji, opening offices there for the first time and pledging support for the region. The United States and PNG signed a defence cooperation agreement in May.

The USAID office in PNG will also serve Vanuatu, which has closer ties to China and Solomon Islands, which signed a security pact with China last year and which U.S. officials say has so far not agreed to any U.S. aid.

Speaking at the inauguration of the regional office in Fiji, Power said Washington had heard the Pacific's biggest request: "first and foremost, to be present."

"Our region is more secure with a strong U.S. presence in our Blue Pacific," Fiji's Assistant Foreign Minister Lenora Qereqeretabua said this week. In June, Qereqeretabua had led a delegation to China.

Meanwhile, Fiji Military Force Commander Ratu Jone Logavatu Kalouniwai said on Friday after the defence chiefs meeting, the geopolitical situation meant Fiji needed to develop networks to link up with "huge military establishments".

"The rules based order is the only thing that allows small countries like Fiji to become equals when we work with larger nations," he said in a video statement.

Former Chinese diplomat Denghua Zhang, a research fellow at the Australian National University, said as the U.S. and China intensify their rivalry, it will be difficult for countries to balance their aid relationships with both powers.

"China's goal is to obtain support from the Global South including Pacific island countries in its geostrategic competition with traditional powers," he said.


The events in Vanuatu this week highlighted the challenges Pacific nations face in seeking to benefit from both the United States and its allies, and China.

On Wednesday, in a parliament built by China, Vanuatu's Prime Minister Ishmael Kalsakau narrowly survived a no-confidence vote that was triggered by lawmakers fearing a security pact with U.S. ally Australia, the region's biggest aid donor, could jeopardise Chinese infrastructure loans.

The U.S. Coast Guard has yet to gain clearance to enter Vanuatu's port, as it does in other Pacific Islands, Coast Guard officials said. China's Peace Ark medical ship, however, docked in Vanuatu this week, and the deputy prime minister told the visiting navy delegation that Vanuatu valued its security and health ties with China.

Solomon Islands Prime Minister Manesseh Sogavare is also reluctant to accept U.S. support.

Sogavare was feted while visiting China in July to sign a policing pact, and on Friday, China handed over a national sports stadium. The project was the largest infrastructure donation China had made to the Pacific Islands so far, Chinese ambassador Li Ming said at the ceremony.

Next month, the United States plans to hold a summit of Pacific Island leaders at the White House, the second such meeting in 12 months, as it seeks to further counter China's influence.

Transform Aqorau, vice chancellor of the Solomon Islands National University, said that while regional governments appreciated the attention from the United States and China, the Pacific Islands would always prioritise their own welfare above a "global strategic chessboard".

"Despite the longstanding needs, major donors like USAID have been notably absent from substantial engagements in our region," he told Reuters.

"This new wave of investment brings hope but also raises concerns. We must ask why the interest is only now, at a time of intense geopolitical competition, rather than during the many years when our needs remained unaddressed?"

(Reporting by Kirsty Needham; editing by Miral Fahmy)