Australia to help build Samoa parliament in latest Pacific aid pledge

(This version of Aug. 8 story has been refiled to clarify project funding in paragraph 8)

SYDNEY (Reuters) - Australia on Thursday promised radio gear and help to build parliament offices in Samoa’s capital of Apia, the latest pledge of aid in the Pacific Islands where China and Australia have been ramping up tit-for-tat donations.

The promises are part of vigorous new campaign by the United States and its allies to reassert influence in the region, where new figures show China has emerged as the second-largest donor.

The size of Australia’s backing for the Legislative Assembly Office was not disclosed in a government announcement, nor did Foreign Minister Julie Bishop give a figure for a radio transmission facility she promised in a radio interview.

Since 2011, China has spent $1.3 billion on concessionary loans and gifts ranging from computer hardware in Papua New Guinea to a new prime ministerial compound in Vanuatu’s capital of Port Vila.

That has stoked concern, as some of the loans fall due, that the small recipient countries are becoming increasingly beholden to Beijing financially, adding to strains in Sino-Australia ties and worrying the World Bank.

“The challenge for all development partners is to ensure investments ... don’t impose onerous debt burdens on regional governments,” Bishop told Australian Broadcasting Corp. by telephone from Apia.

Visiting for a meeting of regional foreign ministers and to announce the aid, she added that Australia welcomed China’s donations to the region, although she has previously criticized the scale of its lending.

Spending by China is almost 9 percent of total aid donations in the South Pacific since 2011, according to figures compiled by the Lowy Institute think tank’s project, which was funded by Australia, well behind Australia’s roughly 44 percent.

But if pledged aid is included, China’s promises total $5.9 billion, or nearly a third of all aid promised to the region’s 14 countries by 62 donors.

“There is definitely an element of briefcase diplomacy in the Pacific,” the Lowy Institute’s Pacific Islands programme director, Jonathan Pryke, told Reuters by telephone from Samoa.

The Lowy numbers also show China jostling with Taiwan to use aid to cultivate diplomatic ties in a region home to a third of Taiwan’s allies.

(GRAPHIC: China's lending in the Pacific -

Taiwan’s aid has helped its allies develop without incurring financial overload, the self-ruled island’s economic and cultural office in Australia told Reuters, adding that it aimed for “reciprocal and mutually beneficial relations” with allies.

Representatives of China in Australia did not immediately respond to Reuters’ requests for comment, nor did a spokeswoman for New Zealand’s foreign minister or foreign ministries in Beijing and Taipei.

Taiwan is China’s most sensitive territorial issue. Beijing considers the island a wayward province of “one China”.

Reporting by Tom Westbrook in SYDNEY; Additional reporting by Ben Blanchard in BEIJING and Yi-Mou Lee in TAIPEI; Editing by Clarence Fernandez