Working Paper: Chinese Economic Relations with Pacific Island Countries

YU Changsen

        Pacific island countries (PICs) are an important part of China’s grand peripheral strategy. In the first decade of the 21st century, the relationships between China and PICs present the full range of development. The Chinese economic relations with the PICs in the areas of trade, investment and development assistance toward the PICs has achieved fruitful results. China’s peaceful rise and the comprehensive development have brought about great benefits to the outside world, including island nations in PICs.

       However, there are some real and potential problems which should be overcome, including that trade volume between China and those island countries is small. China’s investment in the island states focuses on the resource and infrastructure sectors, with the governmental enterprises playing a major role; the efficiency and competiveness of those enterprises are barely satisfactory, and the social responsibilities of these enterprises should be improved. Chinese economic assistance to the island countries is growing fast, but it lacks a sophisticated plan. There is also a lack of accountability, and too much political guidance.

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