WORLD NEWS: Get used to China chequebook diplomacy in Pacific - Australia

Australian Foreign Minister Bob Carr Tuesday said regional powers need to get used to China's so-called chequebook diplomacy in the Pacific as it works to shore up support over Taiwan.

Australian think-tank the Lowy Institute estimated last year that China had pledged more than US$600 million since 2005 in "soft loans" offering long interest-free periods to nations such as Tonga, Samoa, and the Cook Islands.

It has also stepped up its aid to Fiji following the 2006 coup in which military leader Voreqe Bainimarama seized power from the elected government.

Australia and the US have previously expressed concern at China resorting to chequebook diplomacy but Carr appeared to soften Canberra's stance in an interview with the Australian Financial Review.

He urged the region to learn to live with Beijing "developing all the accoutrements of a major power."

"That means defense modernization but it also means a big aid budget," he said.

"My message really is that Australia and New Zealand have got to live with the fact that China will want to deliver aid in this part of the world (and) there is nothing we can do to stop it. It's a fact of life."

China's interest in the Pacific stems mainly from a race for diplomatic influence with Taiwan, which Beijing still regards as part of its territory although the two sides split at the end of a civil war in 1949.

The rivalry saw some Pacific nations constantly change allegiance between Taipei and Beijing in return for increased aid, until Taiwan elected the China-friendly President Ma Ying-jeou in 2008.

Since then the diplomatic one-upmanship has cooled.

Carr's comments came on the eve of the Pacific Islands Forum, a grouping of mainly small island states, along with resource-rich Papua New Guinea and the dominant regional powers Australia and New Zealand, both US allies.

US Secretary of State Hillary Clinton is set to make a rare foray to the meeting in the Cook Islands in a move analysts say is aimed at curbing China's growing influence in the region.

On the broader issue of global aid, Carr said he expected that as China developed it would normalize and "reshape its aid budget to resemble that of other OECD (Organization for Economic Cooperation and Development) countries".

"In other words, not a Chinese port linked by a Chinese road to a Chinese mine, but the more variegated capacity-building assistance that you see today from an OECD country," he told the newspaper.-Interaksyon (August 28, 2012)