CHINA’S TOP CHOICES - Solomon Star News


06 June 2021

SI, PNG dominate China’s appetite for Pacific natural resources


SOLOMON Islands and its Melanesian near-neighbour, Papua New Guinea have dominated China’s appetite for Pacific natural resources, according to analysis of trade data by The Guardian newspaper.

The analysis shows how China dominates Pacific mining, logging and fishing at the cost to it estimated at $3.3 billion.

“China received more than half the total tonnes of seafood, wood and minerals exported from the region in 2019, a haul worth $3.3bn that has been described by experts as “staggering in magnitude”, The Guardian said.

“The country’s mass extraction of resources comes as China has deepened its connections with governments across the region, amid a soft power push that sees it rivalling the influence of the US and Australia in the Pacific,” it said.

China took more by weight of these resources from the Pacific than the next 10 countries combined, with experts saying China “would easily outstrip” other countries, including Australia, when it comes to “gross environmental impact of its extractive industries”.

In 2019 for example, China imported 4.8m tonnes of wood, 4.8m tonnes of mineral products, and 72,000 tonnes of seafood from the Pacific.

The next single largest customer for the Pacific’s extractive resources was Japan, which imported 4.1m tonnes of minerals – mostly petroleum - 370,000 tonnes of wood and 24,000 tonnes of seafood.

By comparison, Australia imported 600,000 tonnes of minerals, 5,000 tonnes of wood and 200 tonnes of seafood.

The Guardian quoted a Shane Macleod, a research fellow at the Lowy Institute, as saying that China is such a dominant customer of Pacific resources because of its proximity to the region and its need to power its economy. 

“They just have the appetite. They have the need for natural resources and they’re looking for sources and the Pacific is geographically close. It has the added benefit that the supply lines are shorter,” he said.

“So you can look at the Ramu nickel mine in Papua New Guinea. That is providing raw material for China in the region, directly, without having to be transported from the other side of the planet.”

“From Solomon Islands, more than 90 per cent of extractive resources go to China when measured by weight. And China regularly claims more than 90 per cent of the total tonnes of wood exported by Papua New Guinea and Solomon Islands,” The Guardian said.

Beyond direct imports of resources, data from the American Enterprise Institute shows more than US$2bn was invested by Chinese companies in Pacific mining in the past two decades. These include investments in the controversial Porgera, Ramu Nickel and Frieda River mines in PNG.

The Chinese government has also sent billions of dollars in official finance into the region, including tens of millions for new marine and industrial zones.

China is the Pacific’s biggest customer whether measured by weight or US dollars. But Australia is close behind when measured in value – $2.8bn to China’s $3.3bn in 2019. This is due to the fact that many extractive products are heavy but relatively inexpensive commodities, like wood.

“In terms of the gross environmental impact of its extractive industries, China would easily outstrip other industrial nations that operate in the Pacific region, including Australia,” in comments attributed to Prof Bill Laurance from James Cook University in north Queensland.

“China’s mineral, timber, fossil fuel, food and other imports from Pacific Island nations are staggering in magnitude. They’re creating enormous challenges for sustainable development in the region,” he said.

Papua New Guinea, Solomon Islands, Vanuatu, Tonga and Palau all regularly send more than 90% of their wood exports to China. China’s size doesn’t neatly explain this concentration, as it takes less than 10 per cent of the wood exported by Malaysia, a much larger producer. Malaysian companies also dominate logging in PNG and Solomon Islands.

According to some estimates, illegal timber makes up as much as 70 per cent of logs exported from Solomon Islands, The Guardian newspaper analysis said.

As a very large and nearby country, China is a natural customer for the Pacific’s exports. But experts said the outsized take also has to do with China’s lack of laws against importing illegal timber, and poor accountability for environmental or social impacts.

“Both [Papua New Guinea and Solomon Islands] suffer from entrenched endemic corruption that has made it (so far) impossible to hold to account both the logging industry and the politicians profiting from them,” said Lela Stanley, a policy adviser at the NGO Global Witness.

“They are known high-risk timber producers, and countries with more stringent laws on illegal timber should avoid them accordingly. Currently China has no law explicitly forbidding the import of illegally produced timber.”

The logging that takes place in the region has huge impacts on communities, The Guardian said.

“Most of those logs have been produced illegally, often … through the violation of land rights. This is not an abstract concept in PNG but one with real-life impacts for countless people across the country. Most rural communities depend directly on their land and forests for at least some of their needs. When that forest vanishes, or is stolen, the impacts are severe.”

While China’s new forest law, which came into effect in July 2020, aims to promote sustainable trade of timber, as well as to safeguard China’s forests, there are still concerns about some companies’ practices.

“Even if the laws and rules change, it will take time and effective enforcement before the companies change behaviour,” Stanley was quoted as saying.


Newsroom, Honiara