Thursday 26 Nov 2020 | 09:20 | SYDNEY
Thursday 26 Nov 2020 | 09:20 | SYDNEY

NZ Foreign Minister asks China a favour


Fergus Hanson


8 April 2011 09:55

I was lucky enough to be in Wellington yesterday for a China symposium. The New Zealand Foreign Minister, Murray McCully, gave the opening address in which he made a few points on China's engagement in the Pacific, emphasising some of the themes and recommendations in the Lowy Institute Policy Brief I launched with Mary Fifita earlier in the week: 'China in the Pacific: The new banker in town'. 

In particular he noted:

I do want to take the opportunity to express the hope that China as a major donor to the region, will in the period immediately ahead become more closely engaged with other donors in the spirit of the Cairns Compact.

I have already conveyed to senior Chinese figures my own ambition to see New Zealand, as the first developed country to enjoy a free trade agreement with China, also become the first nation to partner China in development projects in the Pacific region.

I also hope that this might lead on to other partnerships involving third party donors.

New Zealand’s hosting of the 40th Pacific Islands Forum meeting in Auckland in September of this year, and role as chair for the subsequent twelve months, provides an opportunity to pursue this objective.

There is also one concern I wish to voice today, not aimed at China, but which I hope that China as a major donor and other donors will take into account.

While the sums involved are to larger countries not that significant, we have seen an accumulation of debt on the balance sheets of some Pacific nations.

Loans have been made available for a variety of purposes to the extent that some Pacific countries being assessed by ratings agencies, the IMF or other international institutions are now the subject of adverse comment as a result of their overall indebtedness.

There have also been cases where the ready availability of finance has diminished the incentives for sound budgetary practice and good fiscal management.

All of these are reasons why I hope that we will see the donor community, China included, move towards greater coordination, improved cooperation and increased transparency. 

Follow Fergus on Twitter @FergusHanson.