Prime Minister of Papua New Guinea Peter O’Neill met with Chinese President Xi Jinping during a state visit to Beijing on June 21, 2018. Peter O’Neill expressed the wish that his country join the “Belt and Road” initiative” and develop exchanges with China.
This visit follows the accession of Papua New Guinea to the AIIB in May 2018.
Strong demand for infrastructure
For Peter O’Neill, increasing relations between his country and China is a crucial issue, and building new infrastructure is a priority for Papua New Guinea. The entire country and its capital Port Moresby face frequent power shortages. Less than a quarter of the population has access to electricity. According to a report published by the Lowy Institute, Papua New Guinea faces a global lack of infrastructure in telecommunications, transport, energy, water and electricity. Inhabitants’ health and national economy are greatly impacted by this situation.
Investments made within the framework of the BRI would enable the country to better tackle national issues and to facilitate the integration of the various cultural communities within the country thanks to the development of transportation between Port-Moresby and other cities of Papua New Guinea.
Papua New Guinea remains a relatively poor country whose economy is dominated by mining and logging, so it is highly dependent on global markets.
A trans-Pacific Silk Road
With the accession of Papua to the BRI, a new maritime route in the Pacific Ocean is emerging that could create development opportunities for Oceania countries in logistics, tourism, agri-food, and infrastructure.
With the development of infrastructure, Papua New Guinea will increase its trade with China but also with the rest of the world.
Multiple challenges for China
However, in Papua New Guinea, China will face multiple challenges. The first regards sustainable development. The country is facing massive deforestation, which threatens the region’s environmental balance, and also impacts local communities.
The country is nearly 70% forested, and according to a Chatham House report, the majority of timber production is somewhat illegal, mainly due to poor forest management. China and Papua New Guinea will have to work together to promote a more environmentally friendly industry.
The projects developed in Papua New Guinea, with the help of China, will have to respect the different cultures of the country and promote the balance between communities.
Finally, Papua New Guinea remains a developing country, China will have to be careful that funded projects, through loans, do not threaten Port-Moresby financial capacity.
Beijing will have to be careful that BRI projects China will not endanger the future of Papua New Guinea.
Papua New Guinea’s participation in the BRI should also be of interest to European companies as there are many infrastructures to get built.