PRC Pursuit of Geopolitical and Military Objectives in the South Pacific

Executive Summary:

• PRC investments and cooperation in the South Pacific enhance its military reach and ability to monitor strategic regions. This engagement serves not only economic interests but also significant geopolitical and security purposes, particularly in nations along key maritime and aerial routes.
• There is a correlation between PRC investments and those countries whose ports are deep enough to harbor PLA naval vessels, suggesting a potential strategic calculus lies behind investment decisions.
• The PRC has increased cooperation with Pacific countries, providing security support and economic aid, including infrastructure projects like telecommunications towers, roads, bridges, and ports. This bolsters its influence, challenging the traditional dominance of the US and Australia in the region.
• Since 2013, PRC investments in the South Pacific have focused on energy, transport, and real estate, particularly in countries with strategic deep-water ports. These investments support the PRC’s military and logistical goals under the Belt and Road Initiative (BRI).

The People’s Republic of China (PRC) continues to deepen its relationships and cooperation with Pacific countries. For example, Beijing has initiated cooperation on police and security issues with South Pacific island nations and has announced its willingness to provide security support the Kingdom of Tonga as it hosts this year’s Pacific Islands Forum (VOA, April 5). The PRC’s bolsters these countries both in official media—where it emphasizes that Pacific island nations should not be regarded as the backyard of any country—and in its economic aid to these nations that has resulted in the construction of telecommunications towers, roads, bridges, and ports (CRNTT, April 5). Beijing’s shift over the last decade has received relatively little attention, in contrast to the wealth of analysis on PRC investments in Africa, Europe, and even Central Asia, which has shone a light on the specific goals and patterns of behavior at play in the country’s outbound investments, since the launch of the Belt and Road Initiative (BRI) in 2013.

Analysis of PRC behavior suggests that the geographic location of a country, particularly where it lies in relation to key maritime and aerial routes, is crucial. Countries that are located on pivotal access points for global trade or for geostrategic reasons have geopolitical salience for Beijing. [1] From a military and security perspective, such countries can serve as sites for force projection and logistical support. This is especially true if these countries have deep water ports. Other natural conditions of ports, such as whether they are prone to sedimentation, can also impact their military strategic value. [2] Indeed, data on interactions between the PRC and Oceanian countries suggest a correlation between port depth and increased engagement in terms of investment, diplomatic visits, and cooperation projects. This study cites statistics from the American Enterprise Institute (AEI) on overseas investments by PRC enterprises to analyze investments in the South Pacific since 2013. The research is based on the premise that the PRC operates under state capitalism and thus does not distinguish whether these investments are from private or state-owned enterprises. This approach aligns with the trend under Xi Jinping of growing state involvement in the economy, under the rubric of “the state advances, the private sector retreats” (see China Brief, May 1, 2020).

PRC Investment Targets Energy, Transport, and Real Estate

Narrowly defined, the South Pacific countries include Fiji, the Solomon Islands, New Caledonia, French Polynesia, Vanuatu, Samoa, Tonga, the Cook Islands, Niue, and Easter Island. More broadly, they also encompass Australia and New Zealand. Part of this region’s geopolitical importance lies in its location, with some South Pacific islands lying along shipping routes between the United States and Australia. As such, they could serve as support points for projecting overseas military power for any nation. The PRC has invested heavily in this region since 2013, driven by domestic resource needs as well as geopolitical and security considerations.

As economic aid from the United States and Australia gradually decreased or was even canceled following the end of the Cold War, PRC overtures since 2013 have alleviated the difficulties faced by these countries. Before the 1990s, these nations relied heavily on Australia and the United States for their security and economic needs. Since the 1990s, however, this attention has shifted away. Consequently, Pacific Island countries have felt unsupported, even on transnational issues such as climate change. Beijing now constitutes an alternative—and attractive—offering for these countries, eroding the influence of the United States and Australia in the region.

PRC investment in South Pacific countries is targeted. Long-term tracking of the PRC’s global investments by the American Enterprise Institute (AEI) indicates that investments in the South Pacific since 2013 have been limited to Australia, Fiji, New Zealand, Papua New Guinea, Samoa, and the Solomon Islands; and over three-quarters of that investment has been concentrated in Australia (see Table 1), in particular in Australia’s energy sector. This makes sense given the PRC’s domestic resource demands, and aligns with bilateral trade data, in which coal constitutes a particularly high share.

Table 1: PRC Total Investment in South Pacific Countries from 2013 to Spring 2023 (Millions US Dollars)

(Data Source: American Enterprise Institute, China Global Investment Tracker)

The transport sector also receives a high level of investment. This likely reflects security considerations, as transportation investments are usually heavily influenced by geopolitical considerations. [5] PRC entities prefer to invest more in those countries in the dataset located between the United States and Australia, such as Fiji and the Solomon Islands, for this reason. Investments in countries located on maritime routes linking the PRC and Australia also appear influenced by this factor. Among these, investment in countries that are more pertinent to PRC national security interests are more pronounced. For example, the PRC’s cumulative transportation investments in Papua New Guinea amount to $880 million, whereas investments in Fiji, New Zealand, and the Solomon Islands total only $420 million. Papua New Guinea is the closest to Australia among these countries, so a presence there significantly reduces the cost for the PRC of monitoring Australia’s military activities.

Real estate constitutes a third major area of investment as the AEI dataset presents. Beijing has purchased a considerable amount of real estate in Australia, New Zealand, and Papua New Guinea. Investments by state-owned enterprises (SOEs) in the property sector are atypical. As with transport, real estate investment can also have strategic implications. Comparison with real estate purchases elsewhere in the world is instructive, where several properties are situated near military bases. For instance, in January 2022, concerns were raised in Japan’s parliament, the Diet, that PRC-based companies had purchased land in Hokkaido, just 35 kilometers (22 miles) from a Japan Air Self-Defense Force radar station (Nikkei, October 18, 2022).

Table 2 South Pacific Island Countries’ Commercial Port Conditions and PRC Port Investment

*Units: meters, extracted maximum values.

**19 ports in total; only the top five ports are selected.

***13 ports in total; only the top five ports are selected.
Data Source: World Port Source; Author’s compiled)

In the United States, purchases by PRC entities have come under scrutiny for their proximity to the Grand Forks Air Force Base in North Dakota and the Laughlin Air Force Base in Texas, among others (US Congress, March 20). In Europe, suspicions have been raised about an Alpine hotel purchased by a Chinese family that looked onto an airstrip where the Swiss military had agreed to base several F-35 aircraft (WSJ, May 16).

Over the past decade, Beijing has invested heavily in port infrastructure across the globe. PRC-owned ports and those in PRC-friendly countries allow for the possibility of basing military ships, as has happened at the PRC military base in Djibouti, as well as in Sri Lanka and Cambodia Cambodia (see China Brief, August 14, 2019; AP News, May 8; China Brief, March 22, 2019). Beijing’s investments in the South Pacific region appear to reflect a similar calculus at play. Since 2013, the PRC has invested in Fiji, Samoa, Solomon Islands, and Papua New Guinea—nearly all of which have multiple ports. These countries also tend to have channel and wharf depths far exceeding those of the countries where the PRC has not invested (Table 2). Meanwhile, New Caledonia, French Polynesia, Vanuatu, Tonga, the Cook Islands, Niue, and Easter Island have not received such investment. If one takes port conditions in these countries into account, especially in terms of channel depth, there is a clear correlation, suggesting that channel depth is a significant criterion for investment.

Among the South Pacific countries where the PRC has not invested, a channel depth of 12.2 meters (40 feet) represents the maximum depth of their ports, with the exception of Taiohae in French Polynesia. In contrast, the four South Pacific countries in which the PRC has invested each have at least one port with a channel depth exceeding 12.2 meters. Therefore, a channel depth exceeding 12.2 meters appears to be a sufficient condition for PRC investment. [3] The average channel depth of the four South Pacific island nations where the PRC has invested exceeds this value. Among PRC-invested countries, only in the Solomon Islands is the average wharf depth of its top five ports shallower. (These countries have, on average, five ports each.) Nevertheless, PRC investment in the Solomon Islands still makes sense given its geographic location on a vital route between the United States and Australia, though its belated establishment of diplomatic relations with the PRC in 2019 may explain the relatively low level of investment it has received to date.

Increased PRC Engagement Since 2013

The Belt and Road Initiative is widely viewed to have not just commercial but also geostrategic value for the PRC. If this is the case, then Beijing’s interactions with South Pacific countries since the initiative’s launch in 2013 should have undergone a sea change in the diplomatic realm, and not just in terms of financial and commercial activity, compared with the period prior.

An analysis of the data reveals three trends over the period. First, PRC interactions with South Pacific countries increased in frequency in all cases except with Australia. (This anomaly may be related to Australia’s membership of both the AUKUS and Five Eyes security partnerships.) Second, the PRC tends to engage with Pacific countries through economic, cultural, and social agreements. These agreements are not explicitly political in nature but they carry political implications. This reflects the nature of the PRC’s motivations for deepening cooperation with these countries, which are not entirely straightforward. If the host country’s geographic location holds specific strategic value, Beijing accelerates cooperation on security issues—especially in terms of police and military training and organization. This tendency is observable both before and after the launch of BRI. Third, PRC interactions with Pacific countries since 2013 have been significantly influenced by port geopolitics. Namely, countries with higher capacity and better strategic value for ports have seen a more noticeable increase in interactions with the PRC.

In general, Beijing’s engagement with Pacific Island countries in terms of official visits and bilateral agreements was more active after 2013 compared to before. Australia and Niue are the only exceptions to this trend (Table 3). Australia is a unique case in the region, having a high degree of military and security cooperation with the United States. Niue, meanwhile, is of less geostrategic interest to the PRC. The top three countries in terms of growth of average annual official interactions are Papua New Guinea, New Zealand, and Samoa, respectively. Papua New Guinea and Samoa were also targets of PRC investment during this period, especially in the transportation sector (Table 1). Increased interaction between the PRC and New Zealand officials may be related to air routes between the United States to Australia, particularly those departing from the US West Coast or even from Hawaii. Fiji, located near these air routes, is also significant. Observing the total volume of various vessels on these routes—and any changes in volume—can provide details about military cooperation between the United States and Australia. In November, Fiji Prime Minister Sitiveni Rabuka discussed cooperating with the PRC to develop ports and shipyards (Reuters, November 21, 2023).

Vanuatu and the Solomon Islands also present interesting cases. Vanuatu established diplomatic relations with the PRC in 1982. No official visits occurred for over three decades but, since 2014, 20 visits have taken place. Similarly, since establishing diplomatic relations with the Solomon Islands in 2019, senior officials from both sides have interacted 12 times. Geography likely remains a motivating factor for the PRC in both cases. Vanuatu is situated northeast of Australia and along the air lanes linking the United States and Australia. The Solomon Islands, meanwhile, is in the vicinity of this flight path and also has more ports compared with neighboring countries, including deep water ports. This abnormal frequency of engagements, at which various memoranda and agreements are often signed, indicates that the country may play a significant role in Beijing’s South Pacific strategy.

PRC interactions with developing countries are frequently aimed in part at influencing those countries’ voting behaviors in international organizations. However, current empirical research indicates that the PRC’s interactions with Pacific Island countries have not had this effect. [4] In other words, there is apparently no correlation between Pacific Island countries’ voting patterns in the UN system and the amount of PRC investment they receive. [5] This could mean that PRC interactions with Pacific Island countries have a separate purpose. Namely, the focus is squarely on the geostrategic value to Beijing that these countries present.

A comparison between Table 2 and Table 3 reinforces the theory that the PRC’s disposition towards Pacific Island countries is based on an assessment of their strategic value, which in turn is based on their location. Countries located under or near US-Australia flight paths see more active diplomatic engagement from Beijing and tend to sign more agreements with security implications. This calculation is also influenced by the suitability of natural harbors for potential port infrastructure.

Table 3: Interactions between the PRC and Pacific Countries Before and After the Launch of BRI

*Including bilateral military exchanges and routine strategic dialogues **Including bilateral military exchanges

Source: MFA, accessed May 31, Author’s compilation)

Conclusion

The PRC under Xi Jinping has expanded its investment in port infrastructure around the world with the intention to use them for basing PLA Navy vessels. A correlation between countries receiving growing interest from the PRC and their strategic value, whether in terms of the viability of their ports for potential military use or their location near to US-Australian flight paths, is borne out by the data.

The PRC has not formally proposed or published a specific strategy for Pacific island countries. Observing its policies toward individual Pacific nations over the past decade, however, reveals several commonalities. First, PRC investments in ports in these countries often have strategic significance or intelligence value, such as in Papua New Guinea, Fiji, and the Solomon Islands. Second, the agreements the PRC signs or the statements it issues with these countries may not contain the term “political,” yet the areas of cooperation often carry political implications. Third, the PRC is keen to engage in cooperation on police or public security issues with these countries. These collaborations may not involve military or defense matters, but nevertheless they carry political and security implications. When aggregated, these policies suggest that PRC goals have strategic and security intent. This is particularly evident in efforts to counter potential military actions by the United States and Australia and to find ports in the region that can extend its military projection capabilities.

Since 2020, the United States has become more aware of PRC activity, the attendant erosion of its influence in the South Pacific, and the potential security risks that these developments pose. As a result, the United States and Australia have started to increase attention given to South Pacific countries. The PRC’s proactive regional engagement has been in place for over a decade now, however. In this time, it has already yielded substantial results. More concerted efforts would be required on behalf of the United States and its allies in order to prevent further ceding of the strategic initiative in this part of the world. 

Notes

[1] See, for instance, Robert E. Harkavy, Great Power Competition for Overseas Bases: The Geopolitics of Access Diplomacy (New York: Pergamon press, 2014), pp. 18-19.

[2] See, for instance, Saul Bernard Cohen, Geopolitics of the World System (New York: Rowman & Littlefield Publishers, 2003), p. 195

[3] Estimates for the precise threshold for channel depth differs. For instance, a report from the Council on Foreign Relations (CFR) argues that ports with drafts between 12 and 15 meters would be able to accommodate many PLA naval vessels, including destroyers (which have 6.5 meters of draft), frigates (6 meters), aircraft carriers (11 meters), and cruisers (6.6 meters) (CFR, November 6, 2023). The author selects 12.2 meters here based on the information in the AEI dataset.

[4] Bob Jurriaan Van Grieken and Jaroslaw Kantorowicz, “Debunking Myths about China: The Determinants of China’s Official Financing to the Pacific,” Geopolitics, Vol. 26, Issue 3 (Nov. 2021), pp. 861-888.

[5] Weiqiang Lin, “Transport geography and geopolitics: Visions, rules and militarism in China’s Belt and Road Initiative and beyond,” Journal of Transport Geography, Vol. 81 (December 2019). https://profile.nus.edu.sg/fass/geolinw/lin%20-%20transport%20and%20geopolitics%20(published).pdf