China uses ‘payday loan’ tactic in the Pacific: US Ambassador, Australia / New Zealand
SYDNEY • China is using “payday loan diplomacy” to exert influence in the Pacific, the new US ambassador to Australia said in comments that threaten to escalate regional tensions.
The United States and its regional allies are fighting against China for greater influence in the Pacific – a region that has voices in international forums like the United Nations and controls vast swathes of a resource-rich ocean.
Geopolitical competition has seen China and the United States increase their foreign aid to the region in recent months, which the West says is necessary to prevent the Pacific from slipping into financial distress and becoming susceptible to diplomatic pressure. from Beijing.
Late last year, US Vice President Mike Pence accused China of trapping tiny island nations in foreign aid “debt traps”.
New US Ambassador to Australia Arthur Culvahouse said Pence’s criticism was not strong enough.
“I would use stronger language – I would use payday loan diplomacy,” Culvahouse told reporters in Canberra, after presenting his diplomatic credentials to Australian Governor General Peter Cosgrove.
“Money looks attractive and easy at first, but you better read the fine print,” he said.
Payday loan lenders generally charge a higher rate of interest.
Speaking in Beijing, Chinese Foreign Ministry spokesman Lu Kang said China’s cooperation with the Pacific island countries is good for both sides and widely welcomed by those countries.
Some American officials were not thrilled to see such cooperation, and China hopes the United States can do more to promote the development of these countries and not “continue to create problems out of thin air,” he said. he added.
The Chinese ambassador to Australia said last year that Beijing had not incurred excessive debt in the region.
The Pacific is also a place of diplomatic competition between China and Taiwan, claimed by Beijing as Chinese territory. Taiwanese President Tsai Ing-wen will visit three of her diplomatic allies in the Pacific next week.
The arrival of Mr. Culvahouse, the first American ambassador to Australia for more than two years, comes at a time of bilateral tensions between Canberra and Beijing.
In 2017, then Australian Prime Minister Malcolm Turnbull accused China of interfering in internal affairs. Last year, Canberra banned companies linked to foreign governments from investing in a fledgling 5G network, blocking Chinese Huawei technologies.
China has denied the claims and called on Australia to shed its “cold war” mentality.
Analysts believe Beijing could now use trade to punish Canberra for its criticism.
Sources at Chinese ports told Reuters last month that imports of Australian coal face longer waiting times for customs clearance than other supplies, and the north port of Dalian is halting shipments of Australian coal.