Monday, October 30, 2023

China's Declining Aid to Pacific Islands Increasingly Goes to Allies, Think Tank Reports

China's Declining Aid to Pacific Islands Increasingly Goes to Allies, Think Tank Reports

CANBERRA, Australia (AP) — China’s declining aid to the South Pacific is increasingly targeted toward its political allies in the region as appetite there for Chinese credit declines and competition grows with the U.S. for influence, an independent Australian think tank reported Tuesday.

October 30, 2023

Chinese overall economic influence among the 14 aid-dependent island nations in the region is losing ground because of better loan deals being offered by U.S. allies, especially Australia,
 the Sydney-based Lowy Institute said in its annual analysis of aid to the region.

Focus on the strategic competition in the South Pacific has heightened since China struck a security pact with the Solomon Islands last year that raised the prospect of a Chinese naval foothold in the region.

China has increased aid to the Solomons and neighboring Kiribati since they switched diplomatic allegiances to Beijing from self-ruled Taiwan in 2019, the report said.

The United States has sought to counter Chinese influence in the region with additional diplomatic and economic engagement. President Joe Biden recently hosted Pacific Island leaders at the White House.

China’s overall aid to the island states in 2021 – the latest year for which the international policy think tank has comprehensive data -- was $241 million. The year continued a downward trend in Chinese grants and loans to some of the world's most aid-dependent countries since China’s $384 million peak in 2016, the institute reported.

The latest report revises previous Chinese annual contributions based on additional data but maintains the downward trend.

“It reflects a strategic shift to reduce risk, cement political ties and enhance capital returns,” the report said.

China’s $3.9 billion aid to the Pacific since 2008 was primarily directed to countries with official diplomatic ties to Beijing: These include Cook Islands, Fiji, Micronesia, Niue, Papua New Guinea and Samoa.

“Because China only provides ODF (official development finance) to a subset of Pacific countries, it can play an outsized role in these countries that belies its moderate role share of total regional financing,” the report said.

China was only the third-biggest aid contributor to Pacific after Australia, which provides 40%, then the Asian Development Bank, the report said. China’s contribution since 2008 has been 9%.

The decline in Chinese aid has been driven mainly by a lack of Pacific government interest in Chinese loans that have left Pacific countries including Tonga heavily in debt. The United States has warned that
 Chinese finance is a debt trap for poor countries that threatens their sovereignty.

“What is very clear is that the interest from Pacific governments in Chinese loans, specifically infrastructure loans, has declined,” Lowry researcher Riley Duke said. “It’s just being outcompeted.”

China held a third share of the infrastructure investment in the Pacific market two decades ago, but that proportion had since halved, the report said.

Chinese U.S. Navy sailors arrested and accused of spying for China

Chinese U.S. Navy sailors arrested and accused of spying for China
Both are accused of passing along national defense info in exchange for cash.

August 3, 2023

Two U.S. Navy sailors have been arrested on charges related to allegedly spying for China, federal prosecutors announced on Thursday.

Both are accused of having passed along national defense information to Chinese intelligence officials in return for cash payments, though their cases are separate.

Jinchao "Patrick" Wei, a 22-year-old petty officer 2nd class, was arrested Wednesday and charged with espionage -- more specifically, conspiracy to and committing the communication of defense information to aid a foreign government.

According to officials, citing the indictment against him, Wei served as a machinist's mate aboard the amphibious ship USS Essex, which is currently receiving maintenance at Naval Base San Diego.

Petty Officer Wenheng Zhao, of Monterey Park, California, was also arrested Wednesday, by FBI and NCIS agents, and is charged with conspiracy and receipt of a bribe by a public official, officials said, according to Zhao's indictment.

Zhao, 26, worked at the Naval Base Ventura County in Port Hueneme and had an active U.S. security clearance who had access to classified information, officials said.

His indictment states he had access to material classified as secret, as did Wei, who was born in China and became a U.S. citizen in 2022 as he was allegedly also sending information to his handler.

"Through the alleged crimes committed by these defendants, sensitive military information ended up in the hands of the People's Republic of China," Matthew Olsen, the Justice Department's assistant attorney general for national security, said at a press conference in San Diego.

"The charges demonstrate [China's] determination to obtain information that is critical to our national defense by any means so it can be used to their advantage," Olsen continued. "The alleged conduct also represents a violation of the solemn obligation of members of our military to defend our country to safeguard our secrets and to protect their fellow service members."

It was not immediately clear if either Wei or Zhao had retained attorneys who could comment on their behalf. They have not yet entered pleas.

Both Wei and Zhao had their initial court appearances later on Thursday: Wei was in San Diego and Zhao was in Los Angeles. They are set to return before the judges in their cases for detention hearings next week.

China has not commented.

PHOTO: Assistant Attorney General Matthew Olsen of the Justice Department's National Security Division speaks at a press conference, Aug. 3, 2023, in San Diego.
Assistant Attorney General Matthew Olsen of the Justice Department's National Security Division speaks at a press conference about two U.S. Navy sailors. .

Wei and Zhao are alleged in their indictments to have each worked with Chinese intelligence officers to whom they passed along sensitive information related to the technologies they worked with and about upcoming Navy operations, including international military exercises.

Officials said Wei allegedly began communicating with an intelligence officer from China's government in February 2022 who tasked him with passing photos, videos and documents concerning U.S. Navy ships and their systems.

As part of his job, Wei had to have access to parts of his ship and "access to sensitive national defense information ... including information about U.S. Navy ships' weapons, propulsion, and desalination systems," his indictment states.

Wei and his handler agreed to hide their communications by deleting records of their conversations and using encrypted methods of communications, officials claim in the indictment.

Around February 2022, the same month he is accused of beginning his illicit activity, Wei also told another sailor "that he had been asked to spy for the [Chinese]," according to his indictment.

Wei is alleged to have passed along imagery of the USS Essex, provided the locations of various Navy ships and provided dozens of technical and manual data for systems aboard his ship and other Navy ships.

PHOTO: The Wasp-class amphibious assault ship USS Essex (LHD 2) transits the Arabian Gulf on Oct. 9, 2015.
The Wasp-class amphibious assault ship USS Essex (LHD 2) in the Arabian Gulf 

In June 2022, Wei was paid $5,000 by the Chinese intelligence official after having passed along the initial batch of those manuals, officials alleged.

Throughout their interactions, the intelligence official allegedly instructed Wei to gather U.S. military information that was not public and warned him not to discuss their relationship and to destroy evidence of their relationship and activities.

Randy Grossman, the U.S. attorney for the Southern District of California, said at Thursday's press conference that to his knowledge the espionage charge Wei is facing has never been brought in the district and has only been charged five times in the last six years across the U.S.

"The fact that we've charged it in this case in San Diego is a reflection of the seriousness of Wei's alleged conduct," Grossman said.

Convicted, Wei will face life in prison.

PHOTO: U.S. Attorney Randy S. Grossman for the Southern District of California speaks at a press conference about two U.S. Navy sailors who have been arrested and accused of providing sensitive military information to China, Aug. 3, 2023, in San Diego.

U.S. Attorney Randy S. Grossman for the Southern District of California speaks at a press conference about two U.S. Navy sailors  

Zhao is alleged to have begun working with a Chinese intelligence official in August 2021 and continuing to do so through at least May of this year, according to his indictment. He worked as a construction electrician.

He passed along photos and videos, blueprints for a radar system in Okinawa and operational plans for a "large-scale" U.S. military exercise in the Pacific Ocean, officials claim in the indictment.

In exchange for this information, the indictment against Zhao alleges that he received just $14,866 in payments from the Chinese intelligence officer.

Martin Estrada, the U.S. attorney for the Central District of California, said Thursday that Zhao "betrayed his sacred oath to defend our country" and "betrayed his colleagues at the U.S. Navy."

"The case against Mr. Zhao is part of a larger national strategy to combat criminal efforts from  Chinese state actors to steal our nation sensitive military information," Estrada said.

If convicted, Zhao could fact a minimum sentence of 20 years to life in federal prison.

A Navy spokesperson said in a statement, of Wei and Zhao, that "we take allegations of misconduct seriously, and the Navy is cooperating with the Department of Justice." The spokesperson referred other questions to prosecutors.

The sailors' arrests "sends another clear message of the persistent and enduring threat of Chinese intelligence operations against the United States," according to an outside national security expert.

"Chinese intelligence officers or their proxies carefully spotted, assessed and recruited these two individuals most likely because of their Chinese-American heritage, interest in or current status with the U.S. Navy and access to sensitive information about U.S. naval operations or associated technology," Javed Ali, former senior counterterrorism director on the National Security Council, told ABC News.

Ali, who is now a professor at the University of Michigan, said the range of incidents over the past year ranges from "sophisticated BER-enabled digital reconnaissance against U.S. military bases or critical infrastructure to these more traditional forms of human operations that look to target Americans with access to information that China deems vital to its national security interests."