Trading with the Dragon: Chinese trade, investment and development assistance in the Pacific Islands

Chinese development assistance, raw material exploitation, investment and trade increases in their region are causing Pacific Islanders to ask: ‘Why are the Chinese interested in Pacific Island states?’ and ‘Why has there been an upsurge of the Chinese influence in the Pacific?’. This article seeks to add to the debate on that issue by examining the nature and the evolving purpose of Chinese engagement with the small island states of the Pacific. Only a small proportion of China's outbound investment goes to the Pacific Islands, but it has a considerable effect on the region's economically dependent states. Pacific Island nations have a pressing need for overseas investment and are highly dependent on development assistance. They are, therefore, particularly vulnerable to external players.