By Joe Cash and Shi Bu
BEIJING (Reuters) -China’s President Xi Jinping pledged fresh investment in Tonga when he met King Tupou VI of the South Pacific island nation in Beijing on Tuesday, as the Asian giant works to extend its influence across the Asia-Pacific.
Home to about 108,000 people, Tonga is among the small states at the centre of a growing contest for influence between China and Western nations, thanks to their strategic location, U.N. votes and seabed mineral resources.
China will continue to “provide assistance to Tonga’s economic and social development,” Xi told Tupou when they met in the Great Hall of the People, but did not give a specific figure.
“China and Tonga are true friends who have stood together through thick and thin,” Xi added.
“No matter how the international situation changes, China will continue to support Tonga in safeguarding its national independence and sovereignty.”
China will work on development strategies with Tonga, widening cooperation in areas ranging from trade and investment to agriculture and fisheries, as well as tourism and climate response, state media quoted Xi as saying.
Tonga is heavily indebted to China’s EXIM bank, still paying off construction loans taken out two decades ago. World Bank data shows it owes Beijing $112 million.
Tonga has sought Australia’s help for a restructuring from Beijing and has looked to Canberra and Washington for aid to build resilience to climate disasters and fund infrastructure.
CHINA LOAN REPAYMENTS MAKE UP 48% OF EXTERNAL DEBT
Its loan repayments to China’s EXIM Bank, accounting for 48% of total external debt, have become a key political issue central to the 2025 budget, the budget documents show.
Debt repayments to China spiked last year on a loan used to rebuild its central business district after riots in 2006, which now accounts for two-thirds of debt repayments.
Beijing is looking for countries it can showcase as model members of Xi’s flagship ‘Belt and Road’ infrastructure initiative, to which Tonga signed up in 2018.
Tupou thanked Xi for China’s support in building Tonga’s infrastructure, the Chinese summary of their meeting showed.
Australia has allocated A$27.1 million ($17.49 million) in development assistance to Tonga this year, official documents show, to help boost its resilience to climate change and rising sea levels.
The United States committed $4.1 million in 2024.
Tonga’s debt provides an incentive for China to help Tonga pay it back.
Xi and Tupou witnessed the signing of a “framework agreement” on Tuesday to upgrade economic ties that allows “flexible and practical negotiations” on some issues and aims to expand trade, China’s commerce ministry said.
($1=A$1.5494)
(Reporting by Joe Cash and Shi Bu; Editing by Michael Perry and Clarence Fernandez)
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