China’s aid to Papua New Guinea threatens Australia’s influence

China’s aid spending in Papua New Guinea – with its focus on infrastructure and “few-strings-attached” concessional loans – risks eroding Australia’s influence in the country, with Australian aid sometimes viewed as paternalistic and unwieldy.

A Deakin University submission to a parliamentary inquiry, based on interviews with Papua New Guinean business, political, academic and community leaders argues Australia risks being diminished by rising Chinese spending.

PNG is Australia’s closest neighbour, and for reasons of proximity and a shared history – PNG was under Australian administration until 1975 – Australia has been its most significant international partner.

But China has recently dramatically increased its aid spending in PNG, with a particular focus on signature pieces of infrastructure and concessional loans.

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