PRC exports ‘Djibouti strategy’ to the South Pacific

PRC exports ‘Djibouti strategy’ to the South Pacific

FORUM Staff

It’s known as the People’s Republic of China’s (PRC’s) “Djibouti strategy.” Named after the small, desert country on the Horn of Africa, the strategy is a form of creeping military and economic influence that the PRC exerts over countries in which it does business.

The PRC now hopes to repeat this strategy in the South Pacific, according to a new report by the U.S.-based think tank the Hudson Institute. The PRC plans to build infrastructure in Fiji, the Cook Islands, Samoa, Tonga, Vanuatu and other Pacific islands. Analysts warn that this investment comes with strings attached.

“Beijing is also using economic means to neutralize, seduce or else coerce some South Pacific nations, with potentially serious strategic and political consequences,” wrote John Lee, a senior fellow at Hudson and the author of the report.

The Chinese Communist Party (CCP) began this strategic push in 2017 when it opened a military base in Djibouti, the first such overseas base in China’s modern history. The base was first termed a “logistics facility” but it quickly became clear that it was a launching point for soldiers from the People’s Liberation Army Navy to exert influence on the continent and the strategic Gulf of Aden. It was also a counterweight to military efforts by France, Japan and the U.S., which all have bases in the country.

At the same time it opened the base, the PRC financed new construction in Djibouti including a port, railway, water and energy facilities and a U.S. $3.5 billion free-trade zone covering more than 77 square kilometers. Although many in Djibouti celebrated the investment, the tiny nation now has taken on public debt equivalent to 88 percent of its gross domestic product. Some have warned this “debt trap” could result in the CCP taking control of the port and influencing domestic and foreign policy. (Pictured: The sun sets on the port of Djibouti, a tiny Horn of Africa nation with less than 1 million inhabitants, which has become a military outpost for the People’s Republic of China.)

“China’s strategy on the continent is a comprehensive one, including economic, political and security elements,” Joshua Eisenman, assistant professor at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin, told TheWashington Post newspaper. “For years we’ve looked primarily at the economic side, but now, as China’s relations with Djibouti demonstrate, the political and security elements have become an increasingly important part of China’s relations with African states.”

Now, the PRC has its eyes on Pacific Island nations. Like Djibouti, many of these nations have limited natural resources and are dependent on foreign aid and investment. They are also strategically located near commercial shipping lanes where the PRC is keen to exert control.

“The region is included as part of China’s Belt and Road Initiative [One Belt, One Road], and Chinese money and economic activity in this area are already impactful and growing significantly,” Lee wrote.

The PRC is not only planning military installations and infrastructure projects, it is also increasing development assistance to the island nations. In Fiji, for example, between 2006 and 2013, half of all overseas development assistance came from China.

Lending is also on the rise. Over the course of a decade, PRC lending to South Pacific island nations rose from zero to U.S. $1.3 billion. PRC loans now make up 60 percent of Tonga’s external debt and nearly half of Vanuatu’s external debt. In late 2018, Tonga’s prime minister publicly warned that the PRC may seize strategic assets due to Tonga’s inability to pay off its mounting debt.

The increasing dependence of island nations on China has countries — including the U.S., Australia, New Zealand and Japan — concerned about its potential to upset long-standing stability in the region. The Hudson Institute recommended that these nations band together to offer development initiatives to island nations as an alternative to Chinese investment.

“The sovereignty of these nations could be compromised by [Chinese] predatory economic methods,” said Eric Brown, a senior fellow in Asian affairs at the Hudson Institute. “And that could create a military threat to countries such as Australia and affect the ability of the U.S. Navy and its allies to maintain freedom and order in the Pacific.”

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