Wednesday, October 23, 2019

Chinese private investment leading Beijing's push into the Pacific

Chinese private investment leading Beijing's push into the Pacific

Rainbow City is little more than a swathe of grassland on an island in the Pacific, but it has an apparently grand future.

Key points:

  • Rainbow City is being marketed to foreigners as a "Little Singapore" in Vanuatu
  • The project covering more than 86 hectares will dwarf nearby villages and resorts
  • Locals say they have been kept in the dark about the development
The grass is slowly being replaced with roads, the soil forming the base for apartments, villas and shopping centres.
This patch of paradise on Efate, the island that is home to Vanuatu's capital, will eventually become a mini city for foreigners.
Over the next 10 years, the buildings over 86 hectares of open land will come to dwarf the surrounding villages, private homes and small resorts that neighbour it.
Supported by private, Chinese-backed investment, it is the biggest residential development in Vanuatu.Australia and the United States have been worried about the growing level of Chinese government interest in Vanuatu and the Pacific more broadly, but private investments from China like Rainbow City are booming.
And for locals, it is the most direct source of disquiet and discomfort about the future of their island homes.

'Little Singapore' in the Pacific

Behind Rainbow City is one woman, Ruimin Cheng, who has lived in Vanuatu for about 10 years, and is known locally as Amy Feng.
She is the head of the Port Vila-based FPF Company, which, as well as developing Rainbow City, runs a weekly newspaper and advises foreigners on Vanuatu's citizenship-by-investment program.
Rainbow City, according to Ms Cheng, is part of her efforts to contribute to Vanuatu's economy.
"We want to help Vanuatu … open the tourist market, have tourists come here," she told the ABC.
"People from the whole world will come here … [from] England or Australia, or … China or Hong Kong, Macau."
Although ostensibly aimed at attracting investors from around the world, the marketing and design of the development — which the company has dubbed Little Singapore — is clearly geared towards Asian investment.
Preliminary construction has begun, but not a single property has been sold yet, or even put on the market.
"A lot of people [are] asking how much to buy," Ms Cheng said.
"Soon we will make it to market," she went on to explain, saying the first property sales were due to take place around the end of the year.
In lieu of buyers, the first stages of the development are being funded by Ms Cheng's private companies — some based in Vanuatu, others in China.
When pressed, she was vague about how many and which companies were financially backing the project.

A walled mini city

The concrete wall that rings the Rainbow City site was the first thing to be built and it sits uneasily with ni-Vanuatu, as the people native to the islands of Vanuatu are known.
Graham Toara's village neighbours Rainbow City, but proximity has not brought clarity.
Although the developers are promising ni-Vanuatu will be able to access the schools and hospital planned as part of the mini city, Mr Toara is suspicious.
"When you are talking about a town — town means that there's no wall," he said.
"If you build a town, you have to remove the wall."
His frustration and confusion are clear, as he grapples with the prospect of a giant, gated community of foreigners on his doorstep.
"We don't understand the Rainbow City, actually. We need the Government to explain it to us," he said.
"All the Chinese is building this. The community that is living around here, they do not understand."
There is no shortage of resorts and foreign visitors in Vanuatu, with tourism the mainstay of the nation's economy.
Vanuatu is made up of more than 80 islands in the South Pacific, east of Townsville and west of Fiji, which makes it a hotspot for travellers seeking quiet, untouched beaches and world-class diving.
But this development is of a previously unseen scale and coincides with growing concern about Chinese influence in the region.
Mr Toara is emphatic this development is unparalleled in Vanuatu.
"Never. Never. Never. I am ni-Vanuatu and I have never seen this before," he said.
His mother, Gabriel Toara, presses the point, switching from her native Bislama to halting English to get her message across.
"Over here, and up there, and the other side," she said, pointing out where different Chinese investors had purchased land around her family's village.
"They try to buy here, but my son doesn't want. He come to the land and stop them, not allow [them] to buy here because this is my land."
"We worry how the Chinese come and build house and buy everyplace in Vanuatu and we didn't understand why they buy Vanuatu."

Vanuatu on the world's radar

Anxiety around Chinese-backed development in the Pacific is not new, but it is heightened, given the renewed focus on the region by the world's great powers.
The vast oceanic territory under the control of the island nations through their exclusive economic zones — and their strategically advantageous mid-ocean locations — has thrust the Pacific back onto the radar of China and the United States, as well as their allies.
Last year, US and Australian officials were alarmed at the prospect of China establishing a permanent military presence in Vanuatu, despite both countries strenuously denying such talks ever took place.
The Chinese-funded redevelopment of Vanuatu's Luganville port did little to assuage their concerns.
Vanuatu is already one of the biggest recipients of China's largesse in the Pacific, according to a comprehensive analysis of aid to the Pacific by the Lowy Institute.
Their Pacific Aid Map shows China donated almost twice as much to Vanuatu as Australia through $US99.65 million ($145 million) in grants and concessional loans.
That money paid for the redevelopment of the Luganville wharf along with smaller projects, such as building new offices for the Prime Minister, President, and the Foreign Affairs and Finance ministries.
However, Australia remains the biggest single national contributor of aid to the Pacific, having spent $1.2 billion across the region.
New Zealand and Japan still outrank China in aid committed to the region, too.
Diplomatic officials from both Australia and the US have told the ABC they are concerned China's strategic lending will lead to "debt-trap diplomacy", though some experts have recently cautioned against overstating such concerns.

Claims workers paid $1.70 per hour

While nations that rim the Pacific jostle for influence across the ocean, on the islands and atolls the concern reaches into everyday life.
Developments like Rainbow City hold the promise of jobs and training for ni-Vanuatu, but locals tell a different story.
John Bakoa lives on a property just down the road from Rainbow City and worked on the construction site, helping to build the perimeter wall.
"They don't pay us well," he said. "They pay us 130 vatu … per hour."
That is about $1.70 in Australian terms, and is well below Vanuatu's minimum wage.
Ms Cheng vociferously disputes this, saying full-time workers on the site are paid a "good and high salary" that is "always over" the minimum wage, although it is not clear if that applies to casual workers too.
Locals are also worried Chinese workers will either refuse to buy fruit and vegetables from them, or undercut them at markets.
Mr Bakoa acknowledges his former workplace has the potential to bring investment and infrastructure that will benefit ni-Vanuatu as well as foreigners.
"The Chinese have a lot of money they bring in," he said, but Mr Bakoa does not see it helping those around him.
"The work conditions aren't great, they push you really hard and then you only get a bit of money in return," he said.
The need for assistance and development is high, but so is the desire to retain control and national identity
Mr Bakoa is unsettled by the changes on his island home.
"I hear that … lots of people could be helped by the development."
"But I'm not really sure. You know, because it's Chinese, they have their ideas. We don't really understand it."

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