Researchers say the Pacific has 'woken up' to Chinese investment: Where does that leave Australia?

The latest Lowy Pacific Aid Map shows that Australia remains by far the largest provider of foreign aid in the Pacific, delivering around $17 billion between 2008 and 2021 - about 40 per cent of all overseas development finance in the region. Chinese development assistance continues to fall, with the Lowy Institute saying Beijing has now well and truly abandoned its "Loud and brash" approach to Pacific development projects, replacing it with a strategy to fund "Small and beautiful" initiatives to win political capital in key countries. The Lowy Institute's Alexandre Dayant said China had also stepped back as a major lender in the Pacific, while its total development finance in the region fell to just $241 million in 2021 - down from an average of around $285 million a year before the pandemic. Mr Dayant said that many of Australia's loans were concessional, and designed to help larger Pacific countries like PNG and Fiji build infrastructure and balance their budgets, particularly after the COVID-19 pandemic smashed revenues. Mr Dayant said China had stepped back from financing in the Pacific, and that Pacific Island nations had "Woken up" to the fact that Chinese loans were likely more expensive - and potentially risky - than loans from multilateral institutions and Australia. While donors committed a record-breaking $5.5 billion to the region in 2021, Mr Dayant said that sum was still short of what the Pacific needed. The Pacific Aid Map shows a sharp jump in finance for climate change-related projects, but Mr Dayant said many of them had only a loose connection to climate.