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Graeme Dobell , 07/02/2007 The Pacific Proxy: China vs Taiwan: Graeme Dobell on the damage done as Beijing and Taipei struggle for dominance in the South Pacific.
Chinese interests were targeted during riots in the Solomon Islands capital, Honiara, in April 2006. [Radio Australia]
Fact Box
  • The six South Pacific states that currently give diplomatic recognition to Taiwan are Kiribati, Marshall Islands, Nauru, Palau, Solomon Islands and Tuvalu.;
  • Australia estimates that China has more diplomats in the South Pacific than any other country.;
  • Over 3,000 Chinese state-owned and private enterprises have been registered in the Pacific region with investments of about $US620 million.;
  • It is estimated that about 80,000 of the world's 30 million overseas Chinese live in the South Pacific.;

The desperate contest for diplomatic recognition between China and Taiwan in the South Pacific is changing the face of politics across the region. Graeme Dobell, Radio Australia's foreign affairs and defence correspondent, recently gave a paper for the Lowy Institute for International Policy entitled "China and Taiwan in the South Pacific: Diplomatic chess versus Pacific political rugby". This feature draws from his paper.
Rioters in Solomon Islands chant "waku" - meaning Asian or Chinese - as they burn Chinatown. A pro-democracy rally in Tonga turns into a rage of arson and looting, and the main targets are Chinese shops and stores. After the coup in Fiji, the new military government says it can do without Australia's help, because it can turn to China for support. Australia's Prime Minister muses about the "evil" stalking the South Pacific.

In 2006, the new Chinese diaspora in the South Pacific smelled the smoke of burning buildings and the China-Taiwan diplomatic tango was a dance through flames. The destruction that Solomon Islanders inflicted on Honiara in April had an echo in what Tongans wrought on Nuku'alofa in November. The recurrence of chaos in Melanesian Honiara and the astounding breakdown in the normal order of Polynesian Tonga had different local causes. The one common element was the way that Chinese businesses became targets.

Chinese-owned shops and stores were torched because of the impact of the growing Chinese population across the South Pacific. But there is a diplomatic and geopolitical dimension to the disasters in Solomon Islands and Tonga - the desperate contest for diplomatic recognition between China and Taiwan.

Taiwan has become a player in the domestic politics of Solomon Islands as Taipei fights to retain diplomatic recognition. Tonga recognises China. But the closeness of some members of Tonga's royal family to China meant that attacking Chinese businesses in Nuku'alofa was a way of sending a message to those at the head of a medieval political system.

The diplomatic competition between China and Taiwan is destabilising island states in the South Pacific, making Pacific politics more corrupt and more violent. The diplomatic contest is pushing up the price of politics - especially in Melanesia - and making the game rougher and bloodier.

Chequebook diplomacy has crossed the line from buying diplomatic influence to fostering corruption in domestic politics. China is abusing its prerogatives as a regional leader. The South Pacific is one area that disproves China's standard claim that it never interferes in the internal affairs of other states. Taiwan's obsession with China means Taipei gives little real attention to the impact it is having on Pacific stability.

Larger corruption feeding the small

On Easter Tuesday, 2006, hundreds of angry Solomon Islanders stood in front of their Parliament in Honiara and screamed "waku". The word waku means Asian or Chinese. The anger expressed by that word - and the political struggle it reflected - erupted into two days of violence that deeply damaged the country. Honiara's Chinatown was looted and burned. The physical damage will take years to repair - the economic, social and political repercussions will reverberate even after the rebuilding.

Chinese were targeted during the riots because of the belief that Asian bribes had bought the Prime Ministership for Snyder Rini. The deputy prime minister in the previous government, Rini had walked out of the parliament to claim victory after newly-elected MPs had voted on the leadership. It was the sight of the smiling victor that set off the "waku" chant. Waku money had bought the top job, when many felt the general election signified a rejection of the previous leadership.

Solomon Islands' academic Tarcisius Tara Kabutaulaka wrote that the waku were alleged to have paid large sums of money to MPs. "The protest against Rini's election as Prime Minister was therefore a result of widespread public perceptions that Asian - especially Chinese - businessmen bribed members of parliament into supporting Rini and the 'old guard' who served their interests."

For anyone who has spent any time in the South Pacific, it was a visual and emotional shock to stand in the middle of Chinatown after the riot. The street at the commercial heart of Honiara was rubble and ashes for much of its length. This was not the damage of a natural disaster - this cyclone was destruction visited on Honiara by its own people.

Australians looking at this ruin had to ask questions about the failure of intelligence and security that allowed the mob to run amok. Australia, at the head of the regional intervention in the Solomons, had to contemplate what more should have been done to prevent the spasm of violence. But other governments with interests in the Pacific need to examine their own motives and policies, to see if they actually contributed to the breakdown.

The stakes for Australia are significant and will affect the way Canberra deals with China and Taiwan. The state-building effort in Solomon Islands is turning into a billion dollar project. Australia's intervention in 2003, at the head of the Regional Assistance Mission to Solomon Islands, RAMSI, was a dramatic turn in Canberra's approach to the South Pacific. These are front line issues for Australia in personal as well as diplomatic and financial terms. In the riots, 28 Australian police serving with RAMSI were injured. Five of these police had to be repatriated to Australia for medical treatment, two of them with broken jaws.

The future dollars for RAMSI in the federal budget forward estimates, and the rhetoric of Australia's more vigorous leadership role, carry a corollary - this is an effort that cannot be allowed to fail. Australia's interests, investment, and the bipartisan position of the Federal Government and opposition, point to a Canberra consensus on the need to make RAMSI work. Yet the struggle between Taiwan and China cuts across those interests. The havoc in Honiara is a physical expression of the destructive impact that Taiwan and China can have on small island states.

Pawns in a larger battle

Two weeks before the riots in Honiara, Wen Jiabao flew into Nadi, becoming the first Chinese premier to visit Fiji. Mr Wen was welcomed with the gifts of a pig and a whale's tooth, and a sip of the muddy and lip-numbing traditional drink kava. Mr Wen's gifts for the leaders of the Pacific nations that recognise China included three billion yuan in preferential loans, or roughly $US390 million, recognition as Chinese tourist destinations, anti-malarial medicines, and training for 2,000 Pacific government workers. The tourism and the training can be significant instruments of influence for China.

Premier Wen said that Beijing's effort in the Pacific was not a diplomatic expediency, but rather a strategic decision that China should prove itself a sincere and reliable partner. "China is not rich. Still, we are ready to provide assistance without any political strings attached to the Pacific island countries to the best of our ability."

China's primary objective is to retain diplomatic loyalty and prevent defections to Taiwan. Beyond the constant contest with Taiwan, China's diplomatic activism in the Pacific can be compared with Beijing's work in Africa, South America and Southeast Asia. In Africa and South America, China seeks resources as well as diplomatic influence. In Southeast Asia, Beijing jostles with the United States for influence, markets and resources, and is building diplomatic and strategic influence.

China is well short of turning Southeast Asia into an exclusive sphere of influence, working instead to be paramount power in ASEAN. Beijing's aim is to be a factor in any ASEAN decision-making. The objective in the South Pacific is the same. Today, any significant diplomatic discussion in the Pacific must factor in China's wishes.

The China factor in the Pacific is new. As little as five years ago, China did not weigh so heavily in the islands. The change can be explained as just one more sign of the rise of China. But the China factor also draws strength from the regional perception of a diminished United States role in the South Pacific - exactly the same complaint comes from ASEAN leaders.

The lament of declining US interest is familiar - it was a constant in the South Pacific through much of the Cold War. The difference is that the Soviet Union never did arrive in the South Pacific, despite a few scares that drove up the flow of Western aid. China, by contrast, has achieved a leading position in a surprisingly short time.

A leading-edge of criminality

Beijing has bought its way in with an array of relatively cheap goodies - official visits to China for politicians, a willingness to construct buildings and sporting facilities, and no overt interest at all in 'governance' apart from the crucial issue of diplomatic status. The movement of ethnic Chinese into the South Pacific, the development of Chinese tourism and extension of trade are elements in China's new diaspora.

The arrival of China is being proclaimed in the public buildings of the Pacific - the parliamentary complex in Vanuatu, government offices in Samoa, the foreign ministry in PNG - sports complexes to host the Pacific Games - Fiji, Samoa, Kiribati - and fleets of Chinese-made cars to drive around the VIPs.

Australia estimates that China has more diplomats in the South Pacific than any other country, although Australia has more diplomatic missions. Over 3,000 Chinese state-owned and private enterprises have been registered in the Pacific region with investments of about $US620 million.

The questionable worth of some Chinese investments was explained by John Murray, the detective superintendent in charge of the South Pacific desk for the Australian Federal Police in the decade to 1998. Fiji had given the right of abode to investors who set up companies worth $F500,000, or about $US295,000. Murray found that 214 such companies had been created in Fiji, but 120 of the firms were producing nothing. "Inquiries revealed that a major proportion of the principals were Chinese of Hong Kong origin who brought with them many 'directors' and 'skilled' workers. Checks showed most firms to be no more than paper companies and likely guises for a people-smuggling racket with Australia as the end destination."

The Chinese citizens who settled in the islands in earlier eras had fled the chaos and poverty of their homeland. The latest Chinese arrivals are proud sons and daughters of the new China, and they can look to the Motherland in ways not available or likely in previous generations. Chinese diplomats called up planes to evacuate 300 Chinese nationals from Honiara after the April riots. Beijing is now able to reach out and support its diaspora.

The presence of the new Chinese is evident on the streets of the main cities of Melanesia. The shops and stores are full of Chinese products, often with only Chinese language labelling. Along with the flood of cheap goods come the Chinese counterfeits of consumer products from toothpaste to soap flakes. Your tube of Colgate toothpaste in Melanesia these days is quite likely to be a Chinese-made fake, dressed up in Colgate colours. Some of the new Chinese bring little credit on their homeland, venturing into forms of crime from passport scams to the smuggling of both people and drugs. The threat of Chinese criminal gangs and the flow of Chinese illegals into Papua New Guinea have caused several worried but inconclusive debates around that country's Cabinet table.

Because so many of the arrivals are illegals, there are no reliable figures on the Chinese movement into the Pacific. One of the best guesses is offered by Ron Crocombe, a former director of the New Guinea Research Unit, then professor of Pacific Studies at the University of the South Pacific for 20 years, and now Professor Emeritus.

The Crocombe estimate is that the South Pacific has about 80,000 of the world's 30 million overseas Chinese. The countries with the biggest Chinese populations are Papua New Guinea and Fiji, each with about 20,000. Professor Crocombe quotes research by Fiji's military in 2005 which suggested 7,000 Chinese had entered Fiji illegally in the previous two years. The Northern Marianas, he said, had seen an influx of "about 15,000, all straight from China in the past few years". French Polynesia had about 14,000, but most of these were long-established residents. Guam had about 4,000 Chinese, coming from both Taiwan and China. The estimate for the rest of Micronesia - FSM, Palau, Marshall Islands, Kiribati, Nauru - totalled 1,500. The rest of Melanesia - Vanuatu, Solomon Islands and New Caledonia - totalled 2,600, working mostly in logging and trade. Polynesia - American Samoa, Samoa, Tokelau, Tonga, Tuvalu, Wallis and Futuna, Cook Islands - totalled 1,400.

Professor Crocombe said that China has a long, sad "record of causing internal problems in Pacific countries" because of its diplomatic conflict with Taiwan. The new dimension, embarrassing to earlier waves of Chinese settlers, was the surge of Asian organised crime. "Most smuggling of people to the islands is by Chinese criminal gangs - and there is a lot of it." The proportion of European in Pacific populations is declining, he said, and that of Asian increasing.

"This is true of new citizens, business operators, workers, residents and tourists. Already nearly 90 per cent of tourists to the Micronesian countries and territories are Asians," Professor Crocombe said. The islands are experiencing a minor version of the creeping Sinofication that is taking place in the areas of Indo-China bordering China and in the Russian Far East.

Evil hands and hostile interests

If China's arrival is one of the big changes in the South Pacific this decade, the other is Australia's adoption of a robust role heralded by the Solomon Islands intervention in 2003. The Australian military deployments in 2006 to deal with trouble in Solomon Islands in April, East Timor in May and Tonga in November, showed Canberra's willingness to act as the regional power. Yet a certain worried shrillness has entered the language of Australia's leaders, with the Prime Minister, John Howard, speaking of "evil" hands reaching into the South Pacific and the danger of the islands being taken over by "hostile" interests.

Mr Howard has stated several times his belief that the South Pacific will be more volatile over the next two decades than it is now. In August, last year, Mr Howard announced the $US7.7 billion decision to raise two extra army battalions. "The reason why we need a bigger Australian Army is self evident. This country faces on-going and in my opinion increasing instances of destabilised and failing states in our own region." As one example, the Prime Minister offered his view that Papua New Guinea is "inherently unstable".

In an interview at the end of 2006, Mr Howard spoke of commitment Australia must make to the South Pacific in coming decades for reasons of strategy, history and sentiment. "I can understand Australians saying, 'Well, look, let's forget about it. Leave them to their own devices; don't waste any money', but that's the wrong approach to take, because they will fall into the hands of the evil from other countries... If we just throw up our arms and go away, you'll end up with these places being taken over by interests that are very hostile to Australia."

The leadership responsibility Australia claims in the Pacific produces a complex structure of demands and requirements. Australia wants the Pacific to embrace "greater regional integration and the pooling of resources to promote efficiency and transparency of government". The promise of a substantial increase in aid to Papua New Guinea is "subject to meaningful reform and continued improved performance by the PNG Government".

Australia's aid program has four themes - accelerating economic growth, fostering functioning and effective states, investing in people and promoting regional stability. One of the four measures of the effectiveness of aid is to be combating corruption. While acknowledging long time frames, Australian official policy pushes for "slow and incremental" change in the Pacific.

China looks like an undemanding partner by comparison. Beyond the issue of Taiwan, Beijing is a silent partner, offering no opinions on governance. Chinese diplomats can assure island leaders that they are different to the loud and pushy Australians, as an Australian Senate report on the emergence of China noted last year. "In contrast to the financial aid Australia contributes to Pacific nations, China's aid to these countries is not conditional on them improving standards of governance."

Beijing can be a comfortable partner, operating a value-free foreign policy driven only by self-interest. One of the apparent attractions of the new superpower is that it has no ideology to sell. While Australia imposed "smart sanctions" on Fiji's leadership and cut military ties after the December 5 coup, all China asked for from the new regime was a reaffirmation of the its One China policy. The coup leader, Commodore Frank Bainimarama, said that if Australia turned away, he'd expect help from China. Fiji, he said, "took it for granted that China would always be there".

China's actions in the South Pacific will be part of the answer to the fundamental question of how Beijing will use its power. The "stakeholder" speech by the then-US Deputy Secretary of State, Robert Zoellick, set out the terms of this test in relatively friendly terms in September, 2005. Mr Zoellick was more of a "panda hugger" than a "dragon slayer" in the non-stop Washington argument about China. He said that China had to move from being a member of the international community to accepting responsibility for the maintenance of that global order. "It is time to take our policy beyond opening doors to China's membership into the international system. We need to urge China to become a responsible stakeholder in that system. China has a responsibility to strengthen the international system that has enabled its success." Subsequent commentary by the State Department emphasised the question mark in the title of the speech, noting that Mr Zoellick was urging China to become a responsible global player, not arguing that Beijing has achieved that status.

The South Pacific both suffers and gains from the number of external powers that act as though they do want a stake in the region. The range of these external powers underlines the point that the South Pacific is Australia's sphere of interest, not always its sphere of influence. Certainly, beyond the ability to deploy military and police power, Australia is having trouble achieving its aims in the region. Australia's interest in this sphere is demonstrated by its promise of leadership and aid; the limits of influence are revealed by the difficulty in getting island states to follow where Australia wants to lead.

Black gold and bedfellows

As one example of the number of outside players, consider the rash of South Pacific summits in 2006. China had its Pacific summit in Nadi in April; Japan's summit with the islands was held in Okinawa in May, and France held its summit with the Pacific Forum in Paris in June. The Pacific Islands Forum has 12 formal dialogue partners. The Forum conducts a separate dialogue with Taiwan. This represents a formidable list of countries with some interest in the region. Where China and Taiwan are different is that their diplomatic competition is conducted with an intensity - for Taiwan a desperate intensity - that goes far beyond normal standards of diplomacy or international aid. Sometimes the ferocity of the contest for international recognition makes it look more like a death struggle than anything that could be graced with the term "diplomatic".

The six South Pacific states that currently give diplomatic recognition to Taiwan are Kiribati, Marshall Islands, Nauru, Palau, Solomon Islands and Tuvalu. These six countries are an important contribution to the set of diplomatic dots that hold such symbolic important for Taipei. Apart from the South Pacific, Taiwan has formal diplomatic relations with 18 other states - the Vatican, five countries in Africa and 12 in South America. The diplomatic missions mark out what Taiwan's leaders and officials refer to as their right to 'international space'.

The international space, though, has been shrinking. Since Chen Shui-bian became President in 2000, seven countries have abandoned Taiwan and switched recognition to China. Taiwan's China Post editorialised that this erosion meant the competition had become more intense. "Taiwan must continuously raise its economic aid to ensure that its allies will not be lured away by Beijing. But the practice of using the chequebook to build diplomatic ties is becoming increasingly more difficult in economic and political terms."

Taiwan's Government shows no sign of abandoning a competition that is so consuming it can be unbalancing for others that are drawn into the fight. Taiwan says it "loves" Solomon Islands and the other Pacific countries that give Taipei recognition. However, the supreme focus on China means Taiwan is actually hurting the island states that Taipei claims to want to help. Think of this as the clash between two sets of rules - the diplomatic chess game between China and Taiwan is cutting across the political rugby played in the South Pacific.

The rules of the China-Taiwan game are making Pacific political rugby more corrupt and more violent. The chess game has its own logic and is fundamental to Taipei and Beijing. But the intensity of the chess game is upsetting the conduct of a completely different game being played across the same ground - the political rugby that marks a set of newly independent nations in the South Pacific. As anyone who has seen it can testify, the Pacific version of rugby is rugged and sometimes bloody. But the contest between China and Taiwan is pushing up the stakes and making Pacific politics - especially in Melanesia - far rougher and, now, dangerous.

Solomon Islands is the starkest example of this clash between chess and rugby, showing that the bidding war can produce dramatic consequences in a weak state. On two occasions in the past five years, Taiwan money has unintentionally pushed Solomon Islands into chaos.

The loan of $US25 million from Taiwan's Export Import Bank, EXIM, announced in June, 2001, was a big bribe to retain diplomatic recognition from Solomon Islands. The announced purpose of the loan was to buy peace, by distributing compensation to the victims of ethnic war. But instead of helping stability by reinforcing traditional customs, the Taiwan money sparked a greedy grab for cash that descended into banditry.

As each tranche of the Taiwan loan arrived, politicians and militia leaders scrambled to claim the compensation cash. Criminal gangs used their weapons to extort money. In one of the most infamous instances, the Finance Minister was held in the Cabinet room by armed thugs who demanded he sign a cheque for millions of dollars. The Minister soon resigned from office to ensure his own safety. The risk for anyone who could sign a government cheque was so great that few answered their phones or even went to the office for fear of being forced to sign fresh compensation cheques.

In the 2006 election in Solomon Islands, the Taiwan-China competition again stepped across the line from buying diplomatic influence to fostering corruption. Taiwan took a direct hand in domestic politics by supporting individual candidates.

Australian officials are quite explicit about their knowledge of how Taiwan's embassy in Honiara gave cash to support the electoral campaigns of individual political candidates. Taiwan had to bring in extra diplomatic staff to its embassy in Honiara to make sure the money could be distributed efficiently and quickly. Taipei's intervention in the election was so deep that it did not stop at just backing individual candidates in specific seats. In some seats, Taipei funded two or three candidates. Some of this was insurance, but often the money was used to back 'spoiler' candidates so Taiwan's preferred man - always men - could win through.

The President of the Solomon Islands Labour Party, Joses Tuhanuku, said Taiwan was "brazen and blatant" in interfering in the election by funding candidates and bribing members. At the launch of the Labour election campaign, Mr Tuhanuku said Taiwan was using "dirty money" to decide who was elected to run Solomon Islands. "It is very shocking to observe that the Republic of China is now acting like a local political party, sponsoring candidates - including in my own electorate - involving itself directly in the business of Solomon Islands politics."

Taiwan's aid budget is structured to allow the fight with China to be conducted in secret. About 15 per cent of Taiwan's aid goes to projects and loans, handled by Taiwan's International Cooperation and Development Fund. This is transparent and accountable aid. But the other 85 per cent of aid funding goes through the Ministry of Foreign Affairs, and no proper accounting for this slush funding is offered. This funding ratio indicates policy priorities - 85 per cent of Taipei's effort and cash goes to the never-ending fight with China for "international space"; the remaining 15 per cent can be spared for what the rest of the world would classify as development assistance.

The lack of openness fuels suspicion about the motives and obligations of recipients. If Taiwan wants to fund individual election candidates or individual MPs, then it should publish the amounts given and name the recipients. At least, that would indicate the going price and establish a firmer market for voters to judge the worth of their votes, and how much of the slush is washing their way!

In the Solomons, the competition between China and Taiwan - and the tide of corruption and money politics - crested in April, 2006, when the 50 newly-elected MPs gathered in Honiara for an intense round of caucusing to decide who would claim a parliamentary majority, become prime minister, and form government. The Australian journalist, Mary-Louise O'Callaghan, who has lived and reported on the Solomon Islands for nearly two decades, estimated that the going rate to buy the support of an individual MP for that one vote was a bribe in the range of $SI30,000-50,000, about $US3,900-6,600. That was the vote that elected Snyder Rini and lit the torch in Chinatown. Ms O'Callaghan quoted one newly-elected MP. "I was offered $SI22,000 cash to join AIM [Association of Independent Members] and another $SI50,000 if the group's candidate for the prime ministership got up."

The size of the bribes on offer was confirmed by a former Prime Minister, Francis Billy Hilly. The day after the riots broke out in Honiara, Mr Hilly told Radio Australia's Sean Dorney that bribes had been offered to MPs to get them to switch sides.

"It's the power of money, because people were lured into various positions because of a promise, not only a promise, but the gifts of money. So, how can you fight that, when all the members went broke during the election?"
Dorney: Do you know how much money?
Hilly: "I heard from some of our members it ranges from $SI30,000-50,000."
Dorney: "They were offered that to switch sides?"
Hilly: "Yes. Last night something happened."

If Taiwan or China were serious about playing by the international rules in the South Pacific, they could follow a simple island rule that defines the difference between bribery and a traditional gift. A proper gift, in the Pacific, is one offered in front of the whole village. A traditional gift confers public status to the giver - as a 'big man' - and produces both benefit and some future obligations for the receiver. By contrast, a gift that cannot be handed over in front of the whole village, or the whole nation, is more likely to be a secret bribe.

China and Taiwan play both sides of this definition, giving traditional gifts and secret bribes. But the Beijing-Taipei competition is perverting the way custom operates, affecting the economics and operation of gift-giving. The fiasco of the $US25 million Taiwan loan in Solomon Islands made a mockery of the traditional idea of compensation. A concept that had deep roots in the country - compensation to resolve disputes and atone for wrongs - became a means of criminal extortion.

The Solomons' experience shows that the diplomatic chess game can have real costs for a small island state. Corruption already existed; but Taiwan and China drove up the going price by their bidding war, and attracted more people into the game.

The weak get weaker

The competition has had a diplomatic impact on the efforts to rebuild Solomon Islands. The United Nations has not been able to play a direct role in RAMSI. The Pacific Islands Forum notified the UN of RAMSI. But the Forum could not seek a UN mandate for the intervention, nor ask for direct UN participation. Because Solomon Islands has diplomatic relations with Taiwan, China threatened to delay or block any UN resolution.

The absence of a UN mantle is starting to hurt RAMSI. The Sogavare Government is slowly slicing and strangling RAMSI, claiming that it is merely reclaiming sovereignty abrogated by Australian officials. The support from the Forum is not enough to ward off such interference by Sogavare. The lack of a UN blessing may harm the longevity or legitimacy of the mission.

Asia may be quite happy to deal with stable but weak Pacific states in seeking diplomatic or trade advantage. Some Asian business ventures have a clear interest in exporting to Oceania the crony culture of the fat envelope - white or brown envelopes stuffed with cash. Legitimate Asian enterprises have used illegitimate payments to politicians and officials to secure business goals, especially in logging in Papua New Guinea and Solomon Islands. The over-logging of the Solomons is close to completion. Within the next five to ten years, the natural forests of Solomon Islands will be cleared, with the Asian loggers leaving behind immense economic and environmental costs. The Solomons will have lost a vital resource, central to its budget, which would have lasted another 50 years if properly harvested.

The true "evil" visited on the islands has come from Malaysian logging companies, rather than Chinese or Taiwanese diplomats. The savage clearing of the natural forests of Papua New Guinea and Solomon Islands is symptomatic of weak states, beset by poor accountability and endemic corruption. In the words once used by Sir Anthony Siaguru, corruption in Papua New Guinea is "like a cancer chewing into the fabric of society and slowly eroding established norms of doing business". Australian police officer John Murray lamented the "terminal corruption" in the Pacific emanating from "white-collar fraudsters and widespread domestic corruption which is destroying the fiscal and political integrity of island countries".

Tarred with the same brush

The dark side of Asian activity in the Pacific runs from business bribes to the lawlessness of Asian crime syndicates. The governments of Taiwan and China risk being grouped with corrupt Asian businesses and Asian crime syndicates. The diplomats and the diaspora can be treated as the same actor. The direct interference in local politics by the two governments means they can be placed in the same category as the business spivs in nice suits and the crime triads.

China and Taiwan did not create this culture of corruption. But they are fostering and furthering corruption as they duel over diplomatic recognition.

In creating its own democracy, Taiwan has attacked "black gold" - the cronyism and corruption that once marked its politics. If black gold is no longer tolerated in Taipei, then why should it be acceptable for Taiwan to use the same tactics in the Pacific?

Taiwan needs to decide whether its diplomacy in the Pacific will be accountable and open as befits a democracy. Taiwan is China's democratic nemesis. The democracy should not emulate the dictatorship in trying to suborn the Pacific. Indeed, Taipei should understand better than anyone the tactics China uses in the South Pacific, because Beijing often uses the same approach on Taiwan. As Paul Monk noted, "the Communist Party's preferred strategy is not to use force, but to prevail through a combination of coercive diplomacy and economic inducements". Taiwan's interest is in proving itself different - even better - than China.

The harsh dynamics of the diplomatic chess game in the Pacific mean neither Beijing nor Taipei give much attention to any end game. But if Beijing eventually out-bids Taiwan in the Pacific, that may make Taipei's behaviour less predictable.

A Taiwan that no longer has any "international space" - or perhaps, more accurately "diplomatic face" - will have less to lose. If China were to deprive Taiwan of its six diplomatic flags in the South Pacific, would that make Taipei more amenable to Beijing? History and human nature hint that states pressed too hard can sometimes lash out. Perhaps China should consider the potential for diplomatic victory producing an unfortunate political outcome - an angry or isolated Taiwan that may be more likely to brandish the independence weapon.

The diplomatic chess game does not merely ignore the impact on Pacific politics; China and Taiwan are so engrossed in the moves and counter-moves of the contest that they have lost sight of what the game aims to achieve. A diplomatic chess game mired in a perpetual stalemate, relieved by the odd exchange of pawns, has lost sight of what a positive end-point should look like.

The South Pacific offers a ready regional measure of whether China will act as a responsible global stakeholder. The US did not have the South Pacific in mind when it unveiled the stakeholder model. But the speed with which China is becoming a major factor in the South Pacific means the region will be an early test case. The value-free diplomacy China follows in the islands undercuts any notion of a new Cold War in the region. Australia's governance mantra means it is the only player in this game pushing an ideology. And, ultimately, Australia will not put its whole relationship with China at risk in a confrontation over the South Pacific.

Yet Australia is confronting the reality that its policy interests in the South Pacific clash with China's approach in vital areas such as corruption, financial standards, transparency and democratisation. The South Pacific will challenge Canberra's argument that it can always concentrate on mutual interests with Beijing, not areas of difference. Australia's stated aim in the Pacific is good governance, but China and Taiwan seem more interested in merely buying governments.
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