Chinese infrastructure in the Pacific island region built through soft loans appears to have peaked and a “hangover is setting in” as countries have to start repaying debts, a major study has found.
An exception is Papua New Guinea, which has signed up to Beijing’s Belt and Road Initiative and would see a steep climb in Chinese infrastructure spending if a proposed $4.7 billion national road project goes ahead.
The Lowy Institute has figures on all development projects in the region from 2011 to
2016, and found while Chinese aid has grabbed attention through headline-generating projects, Australia remains the most important donor to the region.
But overall, the study underscored that Australia still provided the most substantial aid to the region even as the overall development assistance budget has been cut under the Coalition.