Report of The Bi-Partisan Taskforce 2019

1.
Acknowledgment ....................................................................................................................... 4
2. Executive Summary .................................................................................................................... 5
3. Introduction ............................................................................................................................... 7
4. Rationale to Review PRC-SI-ROC Relations .............................................................................. 10
5. The Bigger Picture .................................................................................................................... 10
6. Background to PRC-ROC Rivalry ............................................................................................... 16
7. Case studies-countries visited .................................................................................................. 19
8. Trade Analysis .......................................................................................................................... 40
9. Debt Analysis ............................................................................................................................ 44
10. Analysis- Variables, PESTLE, SWOT, TOW ................................................................................ 51
11. Summary of Observations ........................................................................................................ 59
12. Recommendations ................................................................................................................... 64
13. TASKFORCE RECOMMENDATIONS ........................................................................................... 66
14. Conclusions .............................................................................................................................. 68
15. References ................................................................................................................................ 70
16. Annex ....................................................................................................................................... 71
17. Appendix .................................................................................................................................. 71
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LIST OF APPENDIX
Appendix 1 Terms of References
Appendix 2 Schedule of Programs and Visits
Appendix 3 List of people and organizations consulted
Appendix 4 PRC and ROC Allies
Appendix 5 UNGA Resolution 2758
Appendix 6 Pictures
LIST OF ANNEX
Annex 1 White Paper of China’s Foreign Aid
Annex 2 Why China’s ‘Debtbook Diplomacy’ is a Hoax
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ACRONYMS
ADB Asian Development Bank

APEC Asia Pacific Economic Cooperation
CBSI Central Bank of Solomon Islands
DCGA Democratic Government for Change and Advancement
EU European Union
GDP Gross Domestic Product
IMF International Monetary Fund
JICA Japan International Corporation Agency
KMT Kuomintang
MFA&ET Ministry of Foreign Affairs & External Relations
NDS National Development Strategy
MCC Millennium Challenge Corporation
MOU Memorandum of Understanding
MRD Ministry of Rural Development
UNDP United Nations Development Programme
OPM&C Office of the Prime Minister and Cabinet
PIF Pacific Islands Forum
PIFS Pacific Islands Forum Secretariat
PNG Papua New Guinea
RCDF Rural Constituency Development Fund
ROC Republic of China (Taiwan)
PRC Peoples Republic of China
SI Solomon Islands
SIS Small Island States
SIG Solomon Islands Government
TVET Technical Vocational and Education Training
UN United Nations
USA United States of America
WHO World Health Organization
WTO World Trade Organization
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1. ACKNOWLEDGMENT
The Parliamentary Bi-Partisan Task-force Committee has reviewed Solomon Islands

Relations with PRC and ROC. It wishes to place on record its sincere thanks and gratitude to
all who have assisted it with the work.
We are delighted and honored to receive support from our political leaders, colleagues, as
well as from the wider community. This report will shape the future destiny of our country.
The Task-force wishes to express its sincere thanks and gratitude to the Prime Minister, Hon.
Manasseh Damukana Sogavare, and the Cabinet for sanctioning its work. This Bi-Partisan
Task-force is the result of this decision.
The OPMC and the MFAET are also acknowledged for their role in coordinating and
facilitating the task-force’s travel to other Forum countries. It also noted the support and
assistance of the; Secretary to Prime Minister, Secretary to Cabinet, Special Secretary to
Prime Minister, Chief of Staff, in the Office of the Prime Minister and Cabinet, and the Clerk
of the National Parliament, for facilitating the delegation’s travels.
The Governments of Fiji, Papua New Guinea, Samoa, Tonga, Vanuatu, and PRC and ROC,
are also acknowledged and commended for meeting with the delegation. Their frank and
open discussions provided a wealth of information and knowledge to the Team in compiling
the report. Also, members of the Private Sector and Communities in these countries were
receptive and provided useful insights and commentaries to the Committee.
The Task-force also wishes to acknowledge Solomon Islands High Commission offices in
Suva, Fiji and in Port Moresby, Papua New Guinea, for their assistance in the Committee’s
visit. We also noted the interest of the Solomon Islands Academics and students at USP
Emalus Campus, Port Vila Vanuatu, USP Laucala Campus, Suva Fiji, University of Papua
New Guinea in Port Moresby, and Pacific Adventist University, for their participation in the
meetings.
The Task-force Committee takes responsibility for any errors or omissions found in the report
which were not intentional.
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2. EXECUTIVE SUMMARY
The DCGA government has the responsibility to prepare Solomon Islands for the future. This
entails making tough choices now.
The purpose of this report is to guide the SIG-DCGA in its endeavor to review its current
foreign policy on the ‘China question’ and to determine the positive and negative impacts of
its bilateral relations with other donor partners, including ROC, should there be a new bilateral
relations forged with PRC. This is a result of the first 100 days DCGA Policy launched in May
2019 that seeks a Comprehensive assessment on the China question.
SIG has maintained its sovereignty through establishing cordial relations with its current donor
partners over the past years.
In assuming office, DCGA has taken a proactive stance on the ‘One China Policy’. This has
resulted in ROC with other Western allies including USA, Australia and New Zealand, to take
a more active posture towards Solomon Islands.
In recent times, China has gained unprecedented political and economic supremacy. The
impact of China’s foreign aid assistance has recently been bolstered by the BRI program. This
has caught the attention of the Western world. Solomon Islands, therefore, ought to reassess its
current position to determine its future foreign policy engagement on the China question.
The Task-force was established to assess the gains of the current bilateral relations with ROC
and to provide a strategy for the government to counter any positive and negative impacts of a
potential switch.
Solomon Islands must cautiously assess its diplomatic relations with the current traditional
donor partners, including ROC. This will assist in mapping out an effective approach to engage
constructively with its bilateral donors, in ensuring that Solomon Islands must fully realize and
benefit from future programs.
The Task-force has visited five Pacific Island Countries: Fiji, Papua New Guinea, Samoa and
Tonga and Vanuatu. The Asian leg of the visits include: Taipei in Taiwan and Guangdong and
Beijing in China.
The Task-force offers the following recommendations and processes:
I. Normalize diplomatic relations with the PRC. Sign Joint Communique to establish new
diplomatic relations.
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II. Adhere to the “One China Policy/Principle.’
III. Severe diplomatic relations with ROC.
IV. Invite PRC to establish Diplomatic Mission in Honiara, Solomon Islands, and in
Beijing, China respectively.
V. The OPMC to develop strategies and framework to execute the new relationship. These
include the following:
• Set up of a Technical Committee based in the Office of the Prime Minister and
Cabinet with relevant expertise to manage the transition from ROC to PRC.
• During the transition period, the Technical Committee to consult with the relevant
Ministries and Agencies, manage the changes and facilitate our interests in Honiara
and rest of the country, and in Taipei and Beijing, respectively.
• In consultation with other Ministries and Stakeholders, develop a policy of “Strategic
Engagement’ with China.
• Review and enhance our engagement policy with our traditional partners, in view of the
above changes.
• Develop a new engagement strategy with our traditional partners.
• After normalization, institute a ‘China-Solomon Islands Act of Parliament’ to
provide legal framework for this new relation.
These recommendations are an outcome of the Task-force’s comprehensive consultation,

collaboration, and research.
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3. INTRODUCTION
The DCGA made a policy direction to review Solomon Islands Relations with PRC and ROC in April
2019.
This Policy direction was further enhanced through a Solomon Islands Cabinet conclusion on the 13th
of June 2019. Hence, the appointment of a Bi-partisan Task-force. The Task-force was mandated to
review, assess, analyze and report on the current Diplomatic Relations with ROC and prospects of
normalization relations with the PRC.
The report captures the terms of reference as mandated by the Cabinet of Solomon Islands.
3.1 Broader Aims
Conduct wider cross-sectoral research by way of literature reviews, consultations and open dialogue
with relevant stakeholders regarding the ‘One China Policy’ and provide the Government with
recommendations to make an informed decision.
• Consider all aspects and their positive and negative implications that would result if S.I
remains with ROC and/or if S.I switch diplomatic relations from ROC to PRC and advice the
government on those findings.
• In the event the government wishes to remain with ROC, investigate, assess, analyse and
report on improving the current type and level of assistance S.I received from ROC.
• In the event the government wishes to switch from ROC to PRC, investigate, assess, analyse
and report on the type and level of assistance S.I seeks to receive from PRC.
• In the event the government wishes to switch from ROC to PRC, formulate contingency plans
and counter actions should there be repercussions from our traditional partners on existing
bilateral and multilateral arrangements and aid.
• Advise the government on plans to cushion off direct impact on our socio-economic and
political stability.
3.2 Work Plan

Work in collaboration with MFAET to establish contacts with key government offices and
officials together with other key stakeholders of PIF countries of interest, namely; Fiji, Papua
New Guinea, Samoa, Tonga and Vanuatu.
The Task-force further undertook visits to Beijing (PRC) and Taipei (ROC) respectively, to
engage directly and gather vital informations.
(Detailed schedules were annex at the back of this report.)
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3.3 Expected Outcome
The Task Force Committee is expected to achieve the following outputs:
1. Advice Caucus and Cabinet in determining the best strategy and approach with detailed
recommendations for government’s further considerations on;
2. Maintain diplomatic relations with ROC or switch to PRC and the One China Policy’.
3 Identify the necessary steps required to switch diplomatic relationship to PRC
4. Prepare and submit report to Caucus and Cabinet for formal endorsement and approval on the
way forward.
3.4 Membership of the Task Force
The following Members of Parliament were appointed to the Team:
Hon John Moffat Fugui MP, Central Honiara (Chairman)- Government Member
Hon Jamie L Vokia MP, North East Guadalcanal (Deputy Chairman), Government Member
Hon Chachabule Amoi MP, Marovo, Government Member
Hon Rex Ramofafia MP, Fataleka, Opposition Member
Hon Titus Fika MP, West Kwaio, Opposition Member
Hon Makario Tagini MP, Baegu Asifola, Opposition Member
Hon Rolland Seleso MP, South Guadalcanal, Independent Member
3.5 Secretariat Staff
Mr Bernard Bata’anisia, Consultant to the Task Force, Office of the Prime Minister and Cabinet
Mr McFaddean Aoraunisaka, Policy Consultant, Office of the Prime Minister and Cabinet
3.6 Methodology
The methodology used for this report comprises:
Consultations with Member Countries, Leaders, Officials, private sector groups, community leaders,
academics and students.
Research and literature reviews on the PRC and ROC.
Team deliberations and discussions.
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3.7 Consultation Process
The Task-force carried out wide consultations in selected Forum member countries. The Task-force
also visited Taipei (ROC), and in Guangdong and Beijing, PRC.
It was also imperative to hear directly from the member Governments on their relations and to allay
any fears or threats we have in the media and commentaries by foreign governments.
3.7 Mandate of Task-force
The Taskforce was mandated by the Government of Solomon Islands- Cabinet- to fulfil the following
Terms of Reference:
Conduct wider cross-sectoral research by way of literature reviews, consultations and open dialogues
with relevant stakeholders regarding the One China Policy’ and provide the government with
recommendations to make an informed decision.
Consider all aspects and their positive and negative implications that would result if S.I remains with
ROC and/or if S.I switches diplomatic relations from ROC to PRC and advise the government on
those findings.
In the event the government wishes to remain with ROC, investigate, assess, analyze and report on
improving the current type and level of assistance S.I received from ROC.
In the event the government wishes to switch from ROC to PRC, investigate, assess, analyze and
report on the type and level of assistance S.I seeks to receive from PRC.
In the event the government wishes to switch from ROC to PRC, formulate contingency plans and
counter actions should there be repercussions from our traditional partners on existing bilateral and
multilateral arrangements and aid. Advice the government on plans to cushion off direct impact on
our socio-economic and political stability.
(The full Terms of Reference is in Annex 1 of the report)
In carrying out the task, the Task-force committee visited selected Forum Island countries:
Fiji, Papua New Guinea, Samoa, Tonga and Vanuatu. Asian leg includes: Taipei in Taiwan,
and Guangdong and Beijing in China. (The programme of the Taskforce visit is Annex 2 of the
Report.)
The Taskforce met with Government Leaders, senior officials, members of the private sector
and non-governmental organization. (The list of people and organizations consulted are in Annex
3 of the report.)
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4. RATIONALE TO REVIEW PRC-SI-ROC RELATIONS
When elected into power, every government has the moral responsibility to prepare their
country for the future. This involves making important decisions now.
The choice before us is the possibility of making a switch to the People’s Republic of China
(PRC). This may appear a tough decision given our last 36 years with Taiwan. But given
massive changes in the recent geopolitics, the government has decided to take this path. One
hundred and seventy eight (178) UN member countries, for example, have diplomatic relation
with the PRC. Only sixteen (16) countries have relations with Taiwan. Solomon Islands is one
of them. (See appendix 4)
In 1983, our leaders made the decision to have diplomatic relation with Taiwan. This was due
to the prevailing circumstances at that time. Today, the circumstances surrounding the decision
to formally establish diplomatic relations with Taiwan no longer exist. The Cold war era has
ceased. Taiwan is a creation of the conflicting philosophies between the West, led by the USA
and its allies, and the East, led by the Soviet Union and China. The Soviet Union is no longer
around. Even socialist China then, is no longer the one now. China has modernized. It has
embraced the market economy. The World then has changed. We must also change.
As a sovereign state, Solomon Islands must make the choice to prepare its people for the future.
It must make choices that will liberate and enhance its diplomatic relations. Solomon Islands
has to forge new relations that will support its endeavor to grow its economy and develop the
country.
5. THE BIGGER PICTURE
5.1 Geopolitics
The United States of America’s interest in the Indo-Pacific region revolved around its hegemon. To
maintain that hegemon, it has to have economic and military control. This explains the current US-
China trade-war and USA’s military build-up in the region.
Taiwan has been and will always be USA’s pawn in its rivalry with China. Hence, Taiwan may not be
allowed to have full fledge independence. It is unlikely that US will allow Taiwan to be an
independent country. It is in the interest of USA for Taiwan to maintain the status quo for divide and
rule purposes. USA considers Taiwan the first island chain for containment of China. Hence, this is
one of the reasons US continues to sell arms to Taiwan.
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Despite Beijing’s protest, the USA continued to sell arms to Taiwan. In 2008, under President Barrack
Obama’s administration, US agreed to sell arms worth USD$6.5 billion to Taiwan. This is for Apache
attack helicopters and Patriot missiles. In 2010, another arms sale worth USD$6.4 billion was
considered. This is for Black Hawk helicopters, missiles and mine-hunting ships. In 2011, another
arms sale worth USD$5.85 billion was tendered. In 2015, another arms sale for Taiwan for frigates,
anti-tank missiles, amphibious assault vehicles and other military gadgets worth USD$1.83 billion.
In late 2017, under President Trump’s administration, arms sales worth USD$1.42 billion to Taiwan
was announced. This is a clear contradiction to a consensus agreement reached between President Xi
Jingping and Trump in April of the same year. In 2018, US government approved further sales of F-
16 fighter jet spare parts to Taipei worth USD$330 million. In 2019, a further arms deal worth
USD$500 million was concluded between USA and Taiwan.
On the other hand, China does not pursue military expansion, per se. It’s security involvement
therefore is limited, compared to its diplomatic and economic engagements.
Successive US administrations have embarked on their ‘China Containment Policy’ to diminish

China’s peaceful rise. It was the same kind of policies employed by USA and its allies during the
Cold War period.
Post September 11, US foreign and military policy focused much attention on the Middle East. When
Barack Obama took office, he implemented a new strategy called ‘Rebalance’ to Asia-Pacific.
Rebalance was later replaced by ‘Pivot’ to Asia-Pacific. Rebalance and pivot can also be used
interchangeable with ‘reinvigorate’.
Since words and attentions are crucial in understanding policy intentions and implications, it is
important to note these words: Rebalance, Pivot, Reinvigorate and Asia-Pacific.
‘Rebalance’ means the scale is tilting in favour of China. Hence, US needs to rebalance the scale.
‘Pivot’on the other hand means, all focus and attentions rendered in other regions of the globe must be
redirected to Asia-Pacific to counter China’s rise.
‘Reinvigorate’ means, USA has never left the region, it simply need to revamp and reassert its
presence.
‘Asia-Pacific’ on the other is the region that includes China. China is part of Asia and Pacific is part
of USA.
President Donald Trump redrew the map of the region by consolidating ‘Indo-Pacific’ as the new
order.
‘Indo-Pacific’ as a policy statement was used deliberately to eliminate China component off the map
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and literature. India and Indonesia like the term for the ‘Indo’ part, whilst Australia, Japan, New
Zealand and United States prefer the ‘Pacific’ part.
Indo-Pacific is not new in geopolitical literature. It first appeared in the 1920’s by German geo-
politician and academic Karl Haushofer in his writing “Indopazifischen.” In 2007, author Gurpreet
Khurana used the term in his article “Security of Sea Lines.” Japanese Prime Minister, Shinzo Abe,
later picked up the term and used it in his speech to the Indian parliament in 2007. The first formal or
official appearance of the term in government documents was from Australia’s 2013 ‘Defense White
Paper.’1
The Trump administration also used the term ‘Indo-Pacific.’ This adds weight and credibility to the
term. For example, in the US Indo-Pacific Strategy Report (2019), it was stated:
The Indo-Pacific is the Department of Defense’s priority theater. The United States is a
Pacific nation.[…] Inter-state strategic competition, defined by geopolitical rivalry between
free and repressive world order visions, is the primary concern for U.S. national security.
[…] In particular, the People’s Republic of China, under the leadership of the Chinese
Communist Party, seeks to reorder the region to its advantage by leveraging military
modernization, influence operations, and predatory economics to coerce other nations. […]
We will not accept policies or actions that threaten or undermine the rules-based international
order […] The National Security Strategy and the National Defense Strategy articulate our
vision to compete, deter, and win in this environment.
[…]Achieving this vision requires combining a more lethal Joint Force with a more robust
constellation of allies and partners. […]The Department, alongside our allies and partners,
will ensure our combat-credible forces are forward-postured in the region.2
In June 2019, at the ASEAN summit, a joint statement called the “ASEAN Outlook on the Indo-
Pacific’ was released. The use of this narrative is a direct alignment to USA’s policy towards the
region.
From ASEAN perspective, the narrative centered on their interest to take the lead in shaping the
region.
The Asia-Pacific and Indian Ocean regions are amongst the most dynamic in the world as
well as centers of economic growth for decades. As a result, these regions continue to
experience geopolitical and geostrategic shifts. These shifts present opportunities as well as
challenges. On the one hand, the economic growth of the region opens up possibilities of

1
2013 DEFENCE WHITE PAPER.” Australia Government Department of Defence, 2013
2
Indo-Pacific Strategy Report.” Https://Media.defense.gov, THE DEPARMENT OF DEFENSE , 2019
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cooperation to alleviate poverty and elevate living standards of millions of people. On the
other hand, the rise of material powers, i.e. economic and military, requires avoiding the
deepening of mistrust, miscalculation, and patterns of behavior based on a zero-sum game.
Southeast Asia lies in the center of these dynamic regions and is a very important conduit and
portal to the same. Therefore, it is in the interest of ASEAN to lead the shaping of their
economic and security architecture and ensure that such dynamics will continue to bring
about peace, security, stability and prosperity for the peoples in the Southeast Asia as well as
in the wider Asia-Pacific and Indian Ocean regions or the Indo-Pacific.3
France, on the other hand, released its own ‘Indo-Pacific Strategy’. The French strategy is less
ambitious. It is somewhat soft towards China.
The Indo-Pacific constitutes a maritime and land geographical area, shaped by interactions around
strategic centres of gravity. This centers around India, China, Southeast Asia and Australia. It
comprises the Indian, Pacific and Southern Oceans, and forms a security continuum spreading from
the East African coastline to the Western American seaboard. (France and Security in Indo-Pacific
2019)4
In relation to the South Pacific region. Solomon Islands constitutes a vital geostrategic location for the
United States and its allies during World War II. This remains true to this day. The involvement of the
US is more on diplomatic and security issues. The US has not shown interest in addressing Solomon
Islands’ underdevelopment and poverty. This is reflected in an official US government report.5
[…]such a development [the rise of China] could pose challenges to U.S. defense interests
and those of Australia and New Zealand, key U.S. partners in the region. […] Having served
as a vital logistical hub for the U.S. military during World War II, the region continues to be
of geostrategic importance for the United States. […] U.S. engagement with the region is
concentrated upon its diplomatic and security dimensions. (Staff Report, 2018)6
China genuinely pursues development in the region. It is in the interest of Beijing that the region
develops together.
In 2004, China’s President Hu Jintao explains China’s foreign policy as pursuance of “independent
foreign policy of peaceful development”. It aims to foster among its neighbours ‘mutual beneficial
cooperation’ for ‘common development.’ At the centre of that policy is ‘peaceful and stable
international environment.’

3
ASEAN Outlook on the Indo-Pacific - ASEAN: ONE VISION ONE IDENTITY ONE COMMUNITY.” ASEAN, 2019
4
France and Security in the Indo-Pacific .” Directorate General for International Relations and Strategy, 2019
5
The US-China, Economic and Security Commission staff report 2018.
6
ibid
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In 2007, spokesman for Chinese Ministry of Foreign Affairs, Mr. Qin Gang, outlined eight-points that
underpins Chinese foreign and diplomatic relations:
I. China will not seek hegemony. China is still a developing country and has no resources to
seek hegemony. Even if China becomes a developed country, it will not seek hegemony.
II. China will not play power politics and will not interfere with other countries' internal
affairs. China will not impose its own ideology on other countries.
III. China maintains all countries, big or small, should be treated equally and respect each
other. All affairs should be consulted and resolved by all countries on the basis of equal
participation. No country should bully others on the basis of strength.
IV. China will make judgment on each case in international affairs, each matter on the merit
of the matter itself and it will not have double standards. China will not have two policies:
one for itself and one for others. China believes that it cannot do unto others what they do not
wish others do unto them.
V. China advocates that all countries handle their relations on the basis of the United Nations
Charter and norms governing international relations. China advocates stepping up
international cooperation and is against unilateral politics. China should not undermine the
dignity and the authority of the U.N. China should not impose and set its own wishes above
the U.N. Charter, international law and norms.
VI. China advocates peaceful negotiation and consultation so as to resolve its international
disputes. China does not resort to force, or threat of force, in resolving international disputes.
China maintains a reasonable national military buildup to defend its own sovereignty and
territorial integrity. It is not made to expand, nor does it seek invasion or aggression.
VII. China is firmly opposed to terrorism and the proliferation of weapons of mass
destruction. China is a responsible member of the international community, and as for
international treaties, China abides by all them in a faithful way. China never plays by a
double standard, selecting and discarding treaties it does not need.
VIII. China respects the diversity of the civilization and the whole world. China advocates
different cultures make exchanges, learn from each other, and complement one another with
their own strengths. China is opposed to clashes and confrontations between civilizations, and
China does not link any particular ethnic group or religion with terrorism.7

7
Beijing Likens Cheney Criticism to Nosy Neighbor.” The Washington Times,
The Washington Times, 1 Mar. 2007,
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In view of the above, as an island state, the choice that Solomon Islands comtemplates is not simply
between PRC and ROC. It is a decision taken within the context of complex regional and international
interdependence. The government of Solomon Islands must, therefore, redefine itself in terms of its
status as an ‘Island State’ within a global context.
5.2 Solomon Islands as a Sovereign Island State.
This section contextualizes Solomon Islands power of influence (allowable space) in the global
context as an Island state. There are three characteristics that underpins island states and their
interactions. They are: derivative, collective, and particular-intrinsic.8
As a sovereign country, Solomon Islands is defined by its status as an island state. Thus, it is
influenced by agendas set by middle powers and great powers interests. For example, China is a great
power. Its in-road into the Pacific Island regions has posed a direct challenge to the dominance of
Australia and New Zealand, as middle proxy powers of the United States. This being the case, it is
ever more important for SI government to clearly understand power transition dynamics in the region.
In-so-far as great power shifts and transition is concerned, SI as an island state must rediscover,
redefine, and realign itself to harness the benefits of these new power dynamics. In doing so, SI
politicians, statesmen, and bureaucrats, must understand the country’s limited (or allowable space) to
maneuver as characterized by the derivative, collective and particular-intrinsic power-play.
In derivative terms, Solomon Islands normally rely upon and align their posture with great powers. In
this regard, traditionally, S.I relies upon the United States of America and its proxy middle powers,
Australia and New Zealand, as developmental, economic and security guarantors of our state
survivability.
However, as of recent decades, there is clear evidence of a power-shift in the Asia-Pacific region. The
US hegemon of three decades is now directly challenged by the peaceful rise of China and the
development prospects of East and South East Asian countries.
China is at the heart of all these development in the region. Solomon Islands need to review its
alignment in acknowledgement of the current dynamism.
In view of collectivism, it involves coalition of island states through institutions such as the Pacific
Islands Forums (PIF) or the Melanesian Spearhead Group (MSG). Therefore, as an island country, S.I
must stand in solidarity with its neighbors to wield collective voice and power.
As far as collectivism in the PIF is concerned, there are eighteen (18) member countries. Twelve (12)

8
Long, Tom. “Small States, Great Power? Gaining Influence through Intrinsic, Derivative, and Collective Power
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recognize PRC and SIX (6) recognize ROC. With MSG, all member countries are with PRC except
Solomon Islands. Therefore, from a collective perspective, the general trend is obvious. Solomon
Islands must realign itself and lean towards PRC.
Under the particular-intrinsic paradigm, whatever power-base Solomon Islands possess, must be used
to leverage influence for itself. To leverage influence, we have to use our: unconventional,
compulsory, institutional, structural and productive assets. (see the table below)
Particular-intrinsic Derivative Collective

Base (source) Resource inherent to Relationship with Relationships with
small state. great power. smaller powers.
Means (instrument) Threat/Promise to Lobbying, framing, Institutional; ad hoc

withhold or grant. patron alliance coalitions.
manipulation.
Amount (Extent) Contextually Potentially great Depends on coalition
dependent.
Scope (range) Directly related to Issue specific Narrow for ad hoc
resource, plus coalitions; diffuse for
linkages. institutions.
(Michael Handles model)9
In view of the above model, we need to appreciate the country’s standing in the bigger picture and the
limited power and space we operate in. This is not a mere review our foreign policy vis-a-vis PRC and
ROC. Hence, this requires our understanding of the complex interdependence and power transition
dynamics in the Asia-Pacific region.
All these considered, the sovereignty and our national development aspirations are central to our
decision-making.
6. BACKGROUND TO PRC-ROC RIVALRY
6.1 IMPORTANT TIMELINE
1949: The Separation between ROC and PRC.
1949: Mao Zedong’s communist party took power and deposed Chinag Kai Shek and Kuomingtan
with the ROC government to the Island of Taiwan.
1950, Taiwan aligned itself with the United States of America.
1971: Beijing gets UN hold of the UN seat under resolution 275810.

9
Ibid
10
(See UN resolution 2758 in Annex 5 of the report).
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1979, US normalize and formalize relationship with PRC.
1979: US-Taiwan Relations Act signed.
1987-2016: A period of short reconciliation.
1987: people to people exchanges began, in which Taiwan people to visit relatives in PRC.
1991: Taiwan lifts state of emergency rule on the Island.
1992: first talks between the two sides of strait held talks in Singapore.
1995: Beijing protested Taiwan President Lee Teng-hui's visit to the US.
1996: China tests missiles off the coast of Taiwan.
2000: KMT lost power for the first time to DPP.
2005: Beijing adopts anti-secession law towards Taiwan.
2008: Economic Cooperation Framework Agreement was signed between PRC and ROC.
2010: An Economic Cooperation Framework Agreement was signed between PRC and ROC.
2015: President Xi (PRC) and President Ma (ROC) met in Singapore.
2016: End of the honeymoon period
2016: Following Tsai Ing-wen’s election. Her stance against the 'One China Policy'. Beijing's angst.
Madam Tsai claims to maintain the Status quo for peace and stability in the region.
2016: Following Donald Trump's election, he spoke directly with Madam Tsai. Beijing protested.
2017: Republic of Panama normalized diplomatic relations with PRC.
2017: Trump's administration approved the USD$1.4bn worth of arms sales to Taiwan. Beijing
angered.
2018: The Trump administration adopts a law reinforcing US-Taiwan relationship to which Beijing
protested.
2018: Another US- Taiwan arms deal worth USD$330m was signed off by President Trump.
2018: Burkina Faso, Dominican Republic and Republic of EI Salvardo normalize diplomatic
relations with PRC.11

11
Timeline: Taiwan-China Relations since 1949.” News | Al Jazeera, 3 Jan. 2019
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6.2 Rivalry in the pacific
Since independence, most South Pacific states have exhibited a long history of diplomatic recognition
and change in connection with the two Chinese states. For instance:
• Tonga, in 1972, recognizes ROC only to severe the 26 year alliance and realign with PRC in
1998.
• In 1980, Nauru formalized diplomatic relations with ROC. It switched to PRC in 2002. In
2005, it reverted back to ROC.
• In1980, Kiribati formalize diplomatic relations with PRC. In 2003, it switched alliance to
ROC.
• In1991, the Marshall Islands formalize diplomatic relations with PRC. In 1998, it switched its
relations to ROC.
• In 1999, Palau established diplomatic relations with ROC.
• In 1999, Papua New Guinea’s Prime Minister Bill Skate briefly recognizes ROC’s
sovereignty. A week later Mr. Skates resigned and his successor Prime Minister Mereke
Morauta reverted the recognition back to PRC.
• In 2004, the PRC-ROC rivalry made a dent in Vanuatu’s politics. Then Prime Minister Serge
Vohor granted diplomatic recognition to ROC. It lasted for only a few days. Mr. Vohor was
swiftly removed in a motion of no-confidence. His successor, Prime Minister, Ham Lini
through his Minister for Foreign Affairs, Sato Kilman immediately nullify Vohor’s
arrangements and revert recognition back to PRC.
Thus far, only Tuvalu (1979) and the Solomon Islands (1983) have remained loyal friends with
Taiwan.12
• In June of 2019, Solomon Islands is reviewing its diplomatic recognition with ROC with the
possibility to formalize diplomatic relations with PRC.
• In September of 2019, Tuvalu is going to the polls with ROC-PRC agenda high on political
agenda.
Though small, ROC is resolute in competing for allies with PRC. The contestation for diplomatic
allies have fueled all sorts of mixed reactions.
The rivalry has caused instability in the region. This has put-up governments and pull-down others.
This has happened covertly and overtly at the expense of developing island states.
Commentators have accused Taiwan’s ‘Cheque-Book Diplomacy.’ This has fueled corruption. On the

12
Ministry of Foreign Affairs of the People’s Republic of China (2003): Bilateral Relations (cf. Fn. 4) and Ministry of Foreign Affairs,
Republic of China: List of Embassies.
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other hand, PRC was blamed for ‘Debt Trap Diplomacy.’
The Task-force has noted Taiwan’s Cheque-Book diplomacy. It has also debunked the debt trap
theory. The debt trap argument was merely a propaganda instigated by the West to perpetuate the
China fear.
7. CASE STUDIES-COUNTRIES VISITED
7.1 VANUATU
Background
• Vanuatu had shared similarities with Solomon Islands in development challenges. It also shares the
common development partners, Australia, New Zealand and US. The US relies on Australia and
New Zealand as middle powers to ensure stability in the region. Vanuatu is classified as aid
dependent country. It sources larger proportion of its development budgets from outside.
Negotiating and securing potential donors is of great importance.
• Since independence in 1980, Vanuatu has maintained diplomatic ties with PRC. Vanuatu is among
the few countries that have backed China in the disputed South China Sea.
• The PRC/ROC rivalry in the Pacific has made a dent in Vanuatu’s politics. In 2004, Prime Minister
Hon. Serge Vohor, granted diplomatic recognition to Taiwan. This lasted a few days. A motion of
no-confidence removed Vohor on the issue of Taiwan. He was replaced by Hon. Ham Lini as the
new Prime Minister.
• The new Foreign Affairs Minister, Hon. Sato Kilman immediately announced the nullification of
all agreements Mr Vohor had made with Taiwan. The Prime Minister, Hon. Lini, wrote to the
Chinese Premier Wen Jiaobao, reiterating Vanuatu’s respect, support and adherence to the ‘One
China Policy.’
• Vanuatu acknowledges the fact they are dealing with a new and different China from thirty years
ago.
Context
• Vanuatu is a developing country. Between 2000 and 2009, the economy has registered a strong
growth. This is due to strong tourism.
• Sixty percent (60%) of the national income is supported by investment in infrastructures
development sourced from the Millennium Challenge Account (MCA).
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• However, Vanuatu’s economy retracted after 2009 by 8%. Then it further contracted in 2010 and
2012 by 2%. Several factors accounted for the reductions: non-improvement in foreign investment,
reduced construction activities and delays to central infrastructure investments.
• The global financial crisis, changes in the rules of land leasing, rising debt levels and government
instability were the reasons for the retracted economic recession of Vanuatu.
• Vanuatu is an aid dependent country. Its Overseas Development Assistance represents about 13.6%
of its gross national income. This has contributed 30% to its national development budget. Australia
and New Zealand provided 94% of the bilateral overseas development assistance to Vanuatu.
France is also a traditional partner. It had reduced its assistance to Vanuatu from $11 million in
2008 to $3 million in 2012.
• Other important donors are: the EU, ADB and World Bank. They remained active in financing
sectoral developments of Vanuatu.
• On sectoral assistance, Australia and New Zealand are main funders in education. Japan and China
funded infrastructure, whilst the health sector is funded by Australia, Japan, WHO and the Global
Fund. France funded francophone education.
• Vanuatu has limited exploration on its natural resources. Recently it had issued an exploration
license for deep sea mining. However, it is not clear whether natural resources exist under its sea
bed.
• On a debt level, Vanuatu had not taken external loan between 2003 and 2007. It had recently taken
concessional loans with ADB and JICA.
• On debt strategy, Vanuatu follows the IMF recommendation of keeping the level of debt below
40%. Currently, debts level is at 14%. However, the recent loan agreement with China could
increase its future debt.
Vanuatu Engagement with PRC
• In November 2018, the Vanuatu Government had signed seven (7) different Memorandums of
Understanding (MOUs) and Cooperation Agreements with the Chinese Government.
• The MOU covers following areas:
o MOU on cooperation within the framework of “One Belt One Road” initiative
o MOU on Human Resource Development Cooperation
o MOU on Promoting friendly exchange between Guangdong Province and Vanuatu
o MOU on establishing the Joint Economic and Trade Commission between Ministry of
Foreign Affairs of Vanuatu and Ministry of Commerce of China
o MOU on the protocol on remitting partial debts of the government of Vanuatu.
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• Two FRAMEWORK AGREEMENTS are:
o Agreement on Economic and Technical Cooperation

o Framework Agreement on Concessional Loan
• Two AGREEMENTS that are yet to be signed are:
o Fisheries Cooperation Agreement

o Air Service Agreement between Vanuatu and China
• Vanuatu has always adhered to the ‘One China Policy’ since March 1982. China also supported
Vanuatu in its formative years of its struggle for independence through the Non- Alignment
Movement (NAM).
Results and lessons learned:
• Vanuatu has maintained its relation with China since independence. It supports the ‘One China
Policy.’
• Vanuatu never had bilateral relations with Taiwan. An attempt to waive relationship to Taiwan
would cause political instability.
• Vanuatu maintain bilateral relationships with the so-called traditional partners.
• Australia is concerned about Vanuatu’s move to sign the bilateral cooperation with China. It had
issued stern warning concerning military installations.
• It was reported that China was building its military base in Vanuatu. This was dismissed by the
Vanuatu government.
• Vanuatu is adept in managing its diplomacy. It respects Australia’s concerns but maintains a close
relations with PRC.
Projects visited.
• From observations and visitations, Vanuatu benefits a lot from its bilateral relations with China.
Some of the China funded projects witnessed are:
o CCECC Head Office
o Parliament Building
o Korman Stadium
o Mele Bridge
o Port Villa road infrastructure
o MSG Building
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o Finance Building
The infrastructure standards used are those of Australia and Vanuatu.
(see appendix for pictures)
Contacts.
• The Task force visited and interviewed some of key figures and institutions in Vanuatu.
1. Hon. Ralph Regenvanu: Minister for Foreign Affairs,
2. John Robert Simelum Ministry of Finance-Debt Servicing Department
3. Rose Luo China Civil Engineering Construction Cooperation
4. Peter Efeare Melanesian Spearhead Group Secretariat
5. Solomon Islands students USP Emalus Campus
6. Barak Sope Former Prime Minister and Senior Citizen
7. Hon. Jean Pierre Nirua Minister for Education & Training
7.2 FIJI
Background
• Since 1975, Fiji recognizes the ‘One China Policy.’ Fiji sees Taiwan as part of China. It closed its
Trade and Tourism Representative Office in Taipei in 2015. It downgraded Taiwan’s Mission in
Fiji to ‘Trade and Economic Office.’
Context
• The two major ethnic groups in Fiji are the I-Taukei and the Fiji-Indians.
• Fiji is rated as upper middle-income country. Its level of ODA is at 2% but reduced to 1.3%. The
level of ODA has increased recently to 2.9%.
• When western partners left and imposed sanctions on Fiji due to political struggle in 2000 and 2006,
Fiji actively pursuing a ‘Look North Policy’. China was at the centre of that foreign policy
engagement. Beijing stood by Fiji. It assisted with grants, and concessional loans. This has
maintained progress and positive development in Fiji.
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Strategic action.
• On debt trap, Fiji’s government is managing the debt servicing strategy.
• Fiji’s strategy is to manage the bilateral relationship with PRC effectively and derive maximum
benefit.
• Discussion with USP academics in Fiji revealed there was no evidence of Chinese debt trap in the
region. They stated the case of Sri Lanka was often used as an example. But it was a poor
comparison between Sri-Lanka and the region. It cannot be used for pacific island countries.
• Fiji has set code of ethics and practices in infrastructure constructions. All constructors including
donor funded projects must satisfy conditions and procedures set out in the infrastructure
construction regulations.
• The Chinese contractors have complied with the infrastructure codes and standards used in Fiji. As
the supervising agency, the Ministry of Infrastructure in Fiji is satisfied with Chinese contractors.
Fiji’s benefits from China bilateral relationship
• After Cyclone Watson in 2016, Chinese government provided Fiji with disaster relief supplies and
cash grants. Eight (8) cargo flights had arrived in Fiji supplying Tents, waterproof canvas, blanket,
pillowslip, first-aid-kits, portable diesel generator, portable gasoline generator, torches and Halazon
tablets.
• The Chinese government had established the Fiji-China JUNCAO Technology Demonstration
Centre Project in 2017. This was initiated by both leaders of China and Fiji. This project promotes
development of JUNCAO technology in Fiji through technical training, demonstration and
extension. It created new opportunities in employment and farmer’s income, protecting
environment, climate change and sustainable development.
• The Chinese government provides in grant Port Security Inspection Scanner Project for
strengthening border security in the wake of increased criminal activities. China donated 1 set of
Mobile Container/vehicle Inspection system, 4 sets of CT inspection System and 1 set of High
energy large tunnel X-ray cargo inspection system with spare parts and technical training in 2018.
• The ‘Fiji-China Agricultural Development Project Phase II in Vanua Levu and Viti Levu Islands”,
is an agricultural technical assistance by PRC to Fiji. From 2015 to 2016, the first phase of the
project was completed. Two bases for demonstration production have been established in Koronivia
and Dreketi respectively. For rice, advanced technologies, including rice breeding, rice high-yield
and full mechanization in rice production have been promoted. This has improved rice production
in Fiji.
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• In 2018, Chinese government donated 200 vehicles to improve service delivery. These include: 20
cargo vans, 30 ambulances, 50 police cars, 50 school buses and 50 mini buses, as well as 20% of
spare parts. Technical service training was also provided.
Results and lessons learned
• Fiji has visionary leaders. This was witnessed during discussions with the Minister of Foreign
Affairs. The minister advised Solomon Islands government to close relations with ROC and
establish relations with PRC.
• Solomon Island government need to learn from Fiji. That Fiji has a good fiscal policy in place to
deal with loans repayment. A debt unit is established to monitor external debts. Fiji also has a law
safeguarding its resources including land ownerships.
• Fiji has maintained good diplomatic relations with China and the Western powers.
• To identify genuine Chinese investors, Fiji works closely with China.
• Working collaboratively with PRC will enhance Solomon Islands national security and sovereignty.
• Solomon Island government must establish mechanism with some form of regulations and
legislative reforms to accommodate unforeseen influx of Chinese investments and assistance.
• Fiji has benefited from its bilateral extradition arrangement with PRC. In 2017, seventy seven (77)
Chinese criminals were deported from Fiji back to China.
• As regional countries are increasingly implementing tougher joint intelligence operations with
Chinese law enforcement agencies, Chinese criminal are seeking overseas safe havens, including
Solomon Islands.
• There was no evidence of debt trap in Fiji. This is a mere propaganda instigated to perpetuate the
fear of China in the pacific islands.
• The PIFS highlighted that both PRC and Taiwan played supportive role towards the institution and
the region with their various aid programs.
• The PIFS respects whatever sovereign decision of the Solomon Islands government takes on the
matter. The PIFS reiterated that it would stand ready to support Solomon Island Government with
its decision.
• In Fiji, the Task-force met with the former Prime Minister of Tuvalu, Rt. Hon. Bikenibeu Paeniu.
He stated that the relationship with Tuvalu and Taiwan is short-term. It breeds corruptions. He
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further stated that the relations instigated bad governance in Tuvalu. Taiwan only provides USD$10
million annually. This is inadequate for positive development in Tuvalu.
• Tuvaluans are going to the polls on September 2019. Review of PRC-ROC policy will be an issue.
According to Mr Paeniu, it is in the long term interest of Tuvalu to severe ties with Taiwan and
normalize relations with PRC.
Projects visited.
The task force had opportunity to witness some of the Chinese funded projects in Fiji.
• Navua Hospital
• USP Confucius Centre
• Road Infrastructures
People met and Institutions visited:
The task force met with some of the key figures in Fiji and also visited the senior academics of USP
and the Solomon Islands students at USP.
CONTACTs:
1. Hon. Inia Seruiratu Minister for Foreign Affairs

2. Mr Taitusi Vakadravayaca Ministry of Infrastructure and Development
3. HE Mr Qian Bo Chinese Ambassador in Fiji
4. Dame Meg Taylor Pacific Island Forum Secretary General
5. Rt Hon. Bikenibeu Paeniu Former Prime Minister of Tuvalu who was in Fiji
6. Daniel Zhao China Civil Engineering Construction Group
7. Solomon Islands staff

and students USP
8. Associate Professor
Sandra Tarte USP
9. Professor Matthew
G. Allen USP
7.3 TONGA
Background
• Tonga comprised 170 islands. It has a population of about 106, 600 people.
• Tonga is one of the earliest countries in the Pacific region to establish diplomatic relations with
Taiwan in 1972. In 1998, the King of Tonga, His Royal Highness George Tupou V, made a decision
to severe ties with Taiwan and establish diplomatic relations with PRC. Tong has since been
consistent with the ‘One China Policy’.
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Context
• Australia-Tonga-New Zealand cooperated in policing, education and health. Australia and New
Zealand supported Tonga with technical vocational education and training (TVET) and scholarship
programs.
• In infrastructure programs, Australia with the support of World Bank and ADB delivers
infrastructures projects primarily in the transport and energy sectors. China has established an aid
office to coordinate its funding with the Ministry of Finance and National Planning.
• Important bilateral partners of Tonga are: China, Australia, New Zealand and Japan. They have
resident Missions in the country.
• China has established an aid office to coordinate its funding with the Ministry of Finance and
National Planning.
• Tonga established diplomatic relations with China on 2nd November 1998. Tonga opened an
embassy in Beijing.
• China’s support to Tonga is based on the “One China Policy”. China assisted Tonga in its
commercial and development objectives. Main areas are in international forums, trade,
infrastructure, technical cooperation, healthcare, education, agriculture, fishing, commerce, tourism
and culture.
Strategic action.
• The King Tupou V made a visionary move by switching from ROC to PRC. Tonga has since
benefited a lot.
• In the UNDP Assessment Report 2017, three areas are identified for donor’s assistance: Technical
and Vocational education training, health sector and export market, particularly in agriculture and
fisheries. China is targeting manufacturing and food processing for export in Tonga in effort to
improve on national income.
• Tonga has benefited markedly from China. This is due to its recognition of the One China Policy
and signing up to the Belt and Road Initiative.
• Chinese government provided more than 200 scholarships for Tonga’s to study in China. Three
hundred (300) plus athletes were sent to China for high performance training before the Pacific
Games.
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• Tonga also received: buses, tractors, earth moving machines, fishing boats, water tanks, solar power
farms, road infrastructures and port scanning machines from China. Some of these assets are from
Guangdong Province.
• China has written-off one of Tonga’s debts.
Projects visited.
Some of the projects visited by Task Force include:
• St. George Government Building

• Wharf
• Tupou College
• Nukualofa Central Business District
• China Demonstration Farm
• Donated earth-moving machines and equipments
• Fishing boats
The task force met some of the key figures and institutions in Tonga;
1. Hon Semesi Fika, MP Deputy Prime Minister and acting PM

2. Hon. Losaline H. Maási Minister for Agriculture Food and Forest
3. Ms Kelela Tonga Acting CEO of Infrastructure
4. Charge De affaires Embassy of PRC in Tonga
5. Ms Mishka Tuifui Tonga - China Friendship Association
6. Mr Pesi Finua Journalist and Newspaper editor
7. Daniel Zhao China Construction Engineering Company Corporation
7.4 SAMOA
Background
• Samoa was the first Pacific Island country to establish diplomatic ties with China, in 1975. Samoa
continues to maintain the ‘One China Policy’.
• Samoa welcomed and continued to work closely with other donor partners for development
purposes.
• China, however, remains the number one development partner for Samoa.
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Context
• Samoa’s economy is largely dependent on tourism and remittances.
• Samoa’s geographical remoteness from major metropolitan centres burdens the economy with high
transportation costs for its imports, and less attractive prices for its exports.
• Major bilateral partners are: China, Australia, New Zealand and Japan. All four countries have
resident diplomatic missions and aid offices that coordinate closely with Ministry of Finance’s Aid
Coordination/Debt Management Division.
• Samoa has received bilateral assistance in the form of projects, budget supports, debt cancellation
or direct aid from China, UK, Canada, United Arabs Emirates, the US, India, and Cuba.
Strategic action.
• Samoa is the first independent Pacific Island countries to have bilateral relationship with China. It
has maintained the South-South Cooperation partnership with China. Samoa has no bilateral
relations with Taiwan.
• Samoa has received concessional loans from China-Exim bank to construct much needed public
buildings such as: the Ministry of Justice and Courts Complex (2010), the Tofilau Eti Alesana
Parliamentary Complex (2010), Tui Atua Tamasese Government Office Complex (2012), the
national hospital in Motootua, the national broadband network (ongoing), Maritime School for the
National University of Samoa, and a new campus for the Loto Taumafai Disability Society.
• Grants have supported the construction of two sports complexes (2007), four primary schools
(another three are in the pipeline), and renovations to the Women, Community and Social
Development Building (2008).
• In agriculture, Samoa-China Agriculture Development Demonstration Farm Project continues into

its third phase. It is popular among farmers.
• The education sector has received assistance in both infrastructure for primary school buildings,
and grants from the Chinese Embassy for school furniture.
• China also provided scholarships for Samoans to study and train in various universities in China.
More than 200 Samoans have already benefited from this initiative.
• PRC’s support to Samoa ranges from public good infrastructures such as roads and hospital to
sporting facilities.
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• Samoa sent its athletes for high performance training in China before the 2019 Pacific Games.
• China has setup an Agriculture Technical Mission in Apia. This has helped the locals to gain
advanced farming techniques, yielding high crop production. During the 2019 Pacific Games, the
farm has provided for the six thousand (6,000) athletes.
• Chinese Embassy in Apia confirmed that China can filled in any gap left by Taiwan, if Solomon
Islands government decides to switch from Taiwan to China.
Projects visited.
The Task-force team had visited following Chinese funded projects in Apia:
• China funded sports stadium

• China Technical farm
• Infrastructures, Roads & Airport
• Prime Minister’s Office Apia
• Apia Hospital
• Tamasese Government Building
• Apia Maritime School
The Task Force team met with following key figures and institutions.
1. Hon. Lopaoó Natanielu Mua, Minister for Agriculture, Fisheries & Scientific
Research Organisation.
2. Hon. Papaliitele Unasa N.L.Hang, Minister for Works, Transport & Infrastructure
3. Ms Li Hongjing Charge de Affairs PRC Embassy in Samoa
4. His Grace Alipate Lui Mataetiga Catholic Archbishop of Samoa,
5. Mr Jesse Shi , China-Samoa Friendship Association
6. Mr Jim Liu Director China Technical Farm
7. Chinese Doctors in Samoa
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7.5 PAPUA NEW GUINEA
Background
• Since 1976, PNG has maintained the One China Policy. Like most Pacific Island countries,
manoeuvring the One China Policy has been a challenge. Often they are caught up in diplomatic
wrangling between Beijing and Taipei.
• In 1999, under the prime ministership of Bill Skate, PNG briefly recognised Taipei’s sovereignty.
It was quickly revoked by Mereke Morauta after Skate resigned a week later. Morauta reverted the
recognition to PRC. His successor, Michael Somare preferred more formal trading relations with
ROC. In 2002, he sent a trade delegation to Taipei, invoking diplomatic protest from Beijing. Again
under Somare, in 2005, PNG was among the nations supporting Taiwan’s bid to join the World
Health Organization. Again, Beijing protested.
Context
• The aggressive ‘Cheque Book’ diplomacy by Taiwan resulted in resignation of Minister of Foreign
Affairs James Huang and Vice Premier Chiou I-jen. They funnelled US$30million to brokers
dealing with PNG politicians with the intention to switch diplomatic ties from PRC to ROC.
• PNG considers PRC a strategic development partner. It considers PRC’s aid assistance to have
boosted their national economic development and have directly touched the lives of ordinary
people.
• PNG obtained grants and concessional loans from China to support key economic and infrastructure
developments.
• Since 1976, China has assisted PNG. The first major project was an interest-free loan to build the
Sir John Guise Stadium for the 9th South Pacific Games in 1991. The Waigani Convention Centre,
is China’s largest grant-aid project in PNG. Under the 2006 Concessional Loan Facility to the
Pacific, four projects have been supported: Pacific Marine Industrial Zone (PMIZ) (US$31 million),
University of Goroka student dormitories (US$43 million), the Integrated Government Information
System (US$53 million) and the Community College project (US$35 million). Ongoing grant-
based projects include a 10-member medical team to Port Moresby General Hospital (since 2003),
a scholarship program, and the Hagen agricultural technical cooperation program. In Eastern
Highlands, there are successful projects of dry-land rice and mushroom.
• PNG is the largest recipient of Chinese aid in the Pacific. In 2009, this constituted 58% of China’s
total aid to the region.
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Strategic action.
• For procurement and tender processes, PNG Officials hope to make improvements. Overall they
are satisfied with work done by Chinese companies having met PNG strict standards.
• Private sector in PNG welcomes Chinese investments in the private sector.
• Across all projects, language is a barrier. Language barrier has to be overcome.
Projects visited.
• Butuka High School

• Independence Boulevard
• International Convention Centre
• China Habour Headquaters in Port Moresby
• Ela Beach Seafront development
• Road infrastructure
CONTACTS
The Task Force group has visited and discussed with following key figures and institutions;
1. Hon. William Samb, Minister for Transport
2. Hon. Sam Basil , Minister for Treasury
3. Hon. Wera Mori, Minister for Commerce
4. Senior Officials PNG Foreign Affairs
5. Senior Officials Ministry of Transport
6. Mr Daroa Peter, Investment Promotion Authority
7. Mr John Leamy, Chamber of Commerce
8. HE. MrXue Bing PRC Ambassador to PNG
9. Mr Hu Chin-Pin Head of Taiwan Trade & Economic Office, PNG
10. Mr Bernard Edward Link Deputy Chief of Mission, USA Embassy, PNG
11. Mr Peter Tsiamalili Jr PNG Sport Foundation
12. Solomon Islands Staff & Students Port Moresby/PNG
13. Solomon Islands Community Port Moresby/PNG
14. Chinese Companies (SOE) operating in PNG, Port Moresby
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7.6 TAIPEI
Background
• The Task Force met key figures to discuss on current Solomon Islands relations with Taiwan
and the propose plan to switch bilateral relationship to main land China. The group had met
with;
o Vice Foreign Minister Ministry of Foreign Affairs-ROC
o Mr Ger Director General, Department of East Asian &Pacific
Affairs.
o Chairman Department of East Asian &Pacific Affairs – ROC
• The outcome of these discussions provide a strategic long-term plan for Solomon Islands to
consider its future relations with Taiwan.

1. Comparative analysis of China and Taiwan views on Solomon Island

• The opinion below is premised on two interviews: one with the Director General for Pacific
Affairs- Taiwan, and the Vice Foreign Minister of China. These interviews inform the opinion
below and an analysis from the discussions.
• The Deputy Foreign Minister made a critical statement that after 36 years of relations with
Solomon Islands. It summed up as follows:
I. Taiwan’s Foreign Ministry has no fund for specific projects in Solomon Islands.
Any possible allocation of resources can only be authorised by the President. He
reiterated that this has never happened.
II. Taiwan cannot support Infrastructures Development in Solomon Islands.
III. In infrastructure funding, “it is difficult for us [Taiwan] to build infrastructure in
Kiribati or Solomon Islands.” Taiwan has no plans to fund infrastructures in
Solomon Islands.
IV. Taiwan would depend on other geo-strategic partners for future projects in
Solomon Islands. Taiwan stated that the US, Australia, EU and New Zealand have
started talking to them about possible partnerships for Solomon Islands. Taiwan
has asked Solomon Islands government to approach these countries to support its
infrastructure developments.
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Discussions.
• The above comments reflected the position of Taiwan in its long term bilateral relations
with Solomon Islands. The 36 years of diplomatic relation clearly illustrated that Taiwan
will not do anything substantial in infrastructure development to support the economic
growth of Solomon Island.
• Taiwan has no sectoral focus in areas of economic growth. This is why Taiwan has no
development plans to support Solomon Island.
• Solomon Islands should not bet on Taiwan’s assistances. If Taiwan hasn’t done so in the
last 36 years. It is less like to do otherwise in the future.
7.8 BEIJING
Background
The Task Force group met with the following key figures in Beijing;
• HE Mr Zheng Zheguang Vice Minister for Foreign Affairs

• Mr Ouyang Weimini Vice Governor of Guangdong Province
• Cang Feng Vice President Guangdong Friendship
• Madam Li Xiaolin President CPAFFC, Beijing
• President China Harbour Construction Office, Beijing
• President Free trade zone Company, Guangzhou
• President Huaweii Company, Beijing
• President China Civil Engineering Construction Corporation, Beijing
This is a recorded outcome of the discussions between the Ministerial Delegation, the Task-force group
and the Vice Foreign Minister of China. These discussions are important for Solomon Islands
government to consider wedging a bilateral relations with PRC.
An Interview with China’s Vice Foreign Minister.
• China is an old civilised nation with a new mission. This mission reflects the subtle nature of
China’s pursuit to be a global player. Most observers agreed that it will be the world’s number
one economy by 2030. Importantly, its domestic economy extends its foreign policy. Equally
important, the Belt and Road Initiative (BRI) is China’s economic framework. BRI anchors
China’s international foreign relations policy.
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• It’s foreign policy, including the issue of Taiwan, are premised on an alignment between its
national and international priorities that contribute to its own state practice.
In terms of the Chinese diplomacy:
• China have a vision to build a better global community through peaceful development. China’s
diplomacy is premised on shared security, openness, respect and inclusiveness.
Comments on China and Solomon Islands:
• China attached great importance to have relations with Solomon Islands. He remarked,
“We have noticed that they have been a growing call by people with good sense in
Solomon Island for diplomatic relations with China. The current government has also
made the proposal an important item in its agenda. I believe that your relation now to
have a deeper understanding. China hopes the Solomon Island government will make
earlier decisions to have diplomatic relations with China.”
Final Analysis on the outcome of the discussion:

• The High level delegation comprising Ministers, MPs, and members of the Bi-partisan Task-
force is seen by China as indicative of Solomon Islands government seriousness to shift its
recognition to the PRC.
• Chinese people had lived in Solomon Islands before Independence. The Chinese communities
in Solomon Islands has grown. Today, the Chinese are the main business investors in Solomon
Islands. China viewed its presence in the Solomon Islands against the backdrop of the Chinese
people who have lived in the country. It is through this people to people relations that China
hopes to establish its diplomatic relations, should a decision is made by Solomon Islands
government to establish bilateral relations with the PRC.
• In recent years, China observed that although there are no formal relations between the two
countries, it has maintained trading links with Solomon Island. Solomon Island is China’s third
largest trading partner in the Pacific.
• China is Solomon Islands largest trading partner.
• China observes Solomon Island as an important country in the Pacific region. After
normalization, China can bolster infrastructure, investment, agriculture, fisheries and minerals
sectors immediately.
China, United Nations and the Global Community:
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• China is one of the five members of the UN Security Council. Its recognition as the one China
representing China is provided for in UN resolution 2758. This lays the foundation for the
international communities’ engagement with PRC.
One China policy:
• It is now an internal principle and international norm observed, upheld and practised by all UN
members in relation to China. Currently there are 178 UN members that have established
relations with China. Since 2016, others who have done so include Panama, Dominican Rep,
El Salvador, and Burkina Faso. This is the foundation upon which China establishes relations
with countries. Therefore, the One China Principle is consistent with international law and
norms that establish international relations.
• The One China Principle is the prevalent trend in international relations, and has enjoyed
support in the international community. It has three strands:
i) One China in the World;
ii) PRC as the only lawful government representing China, and
iii) Taiwan as part of China.
China – Taiwan:
• Since 1949, the mainland and Taiwan belongs to China. The legal basis for this remains. The
recognition at the UN for this creates States practice. “The Chinese people will not allow a
separation in any name or form. We have the means, sufficient capability and strong will to
achieve national unification. Diplomacy with Taiwan is not with the progress of our times and
international norms. ”
Trade:
• From trade perspective, the GDP of China is more than 20 times of that of Taiwan. The
economies of both are highly integrated. Taiwan depends on China. In 2018, trade between
them stands at USD$326. 2 billion. Of this, exports by Taiwan to China is USD$177 billion.
• More than half of Taiwan exports goes to China. China is Taiwan’s major market and export
destination. Taiwan’s economy cannot grow without mainland China.
China Foreign policy and Solomon Islands:
• China Foreign policy has features of traditional and Chinese’s diplomatic philosophy.
Chinese’s diplomacy embraces the principle that all countries are equal under the UN Charter.
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• This is the foundation upon which China sees Solomon Island as a sovereign State. It desires
to establish relations on mutual respect and trust, without third party interference.
• As sovereign independent nations, China respect non-interference and fundamental principles

of international relations. It is up to the people of Solomon Island to choose their paths of
development. China has never interfered in the affairs of countries. It always oppose the
interference in domestic affairs of other countries.
• China believes that as two sovereign nations (SINO-SI), our efforts should not be affected by a
third country. We also believe that in developing relations, we will not allow foreign
interventions in our decisions. China firmly rejects such interference. Our interests as sovereign
states must be the interest of our two peoples.
China-Solomon Islands Relations:
• China’s efforts to develop relations with Solomon Islands are not targeted at geo-political
considerations or third countries interests. We develop friendly and diplomatic relations to help
each other for development.
The Belt and Road initiative:
• The Belt and Road Initiative (BRI) is a joint endeavour through countries that have relations
with China. They collaborate and cooperate for shared benefits in various sectors, including
infrastructure. Today, there are 160 countries and International organizations that have signed
cooperation agreements with China. Basically, it aligns development strategies of countries
through infrastructure, and exchanges and common prosperity projects. Its principles are
collaboration and consultation, unlike the Marshall plan, or other plans advocated by other
countries.
• All Pacific Island Countries that have relations with China had signed BRI cooperation
documents.
China’s development philosophy:
• China’s development philosophy is to encourage development that is innovative, coordinated

and openly shared. One that diffuse risk, targeted poverty alleviation, and target pollution.
• China observed that Solomon Islands has many resources and hardworking people. If we can
step up our cooperation to combine our great strength in our huge domestic market, resources,
investment, trade, infrastructure, I am sure it will yield development results for S.I. It singled
out areas for cooperation that includes: forestry, mineral, fisheries, tourism and climate change.
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• China has a framework (BRI) ready for Solomon Island to sign after the transition period. This
is already working considering that 160 countries and organisations have signed with China.
• China has a diplomatic and development philosophy for engaging with Solomon Islands. These
are proven philosophies as it has tried and seen them work in its domestic economy and with
its friends. China has offered specific sectors that it can help Solomon Island. These include:
o Government Scholarships,
o 2023 Pacific Games preparations
o Promoting trade development
o Improving infrastructure,
o Investment,
o Strenthening capacity building
o Tourism,
o Fisheries
o Minerals sectors
o Developing foreign assistance
o Helping improve people’s livelihood
o Promoting economic and social development
o Participation in international exchanges and cooperations
o Technical cooperation
o Human resources development cooperation
o Medical teams cooperations
o Volunteer programs
o Emergency humanitarian
o Debt relief
o Promoting agriculture development
o Improving level of education
o Improving medical and health services
o Building public welfare facilities
o Supporting post disasters relief efforts
o Strengthening environmental protection and,
o Foreign assistance under regional mechanism.13
• Finally, the fact that 178 countries have established diplomatic relation with China points to a
global consensus, an international relations norm.

13
To be referenced
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• China clearly has provided a framework for engaging with Solomon Island. A framework that
is already working.
• Therefore, China has this Belt and Road Initiative framework for assisting SIs. SIs will sign its
Cooperative Agreement right after formalizing relation with China. In contrast, Taiwan has
nothing of this nature. China has a development and diplomacy philosophy (way of thinking,
respecting and doing things internationally) that will inform its relations with SIs. China has
clearly outlined that it will help in specific sectors, and on a bilateral basis. Not waiting for third
parties as the case of Taiwan.
• China as a Security Council member, it has leverage internationally and regionally. Against, all
these, Taiwan has been clear, it cannot do this and will not. On the basis of the above, the fact
remains, Taiwan has none of what China can offer for SIs. Even Taiwan depends on China for
growing its economy. And the global consensus that is now international relation norm that
recognized the “One China Policy” is clearly provided for in the UN General Assembly
Resolution 2758. Certainly 178 UN members cannot be wrong about this.
The practical reasons below make a case for Solomon Island government to consider wedging bilateral
relations with China.
a) United Nations and One China Policy: 178 countries have diplomatic relation with PRC. China
is one of the five permanent members of the UN Security Council. Its recognition as the one
China representing all Chinese people is provided for in UN resolution 2758. The foundation
is now a principle and international norm of international relation upheld and practiced by all
UN members.
b) Solomon Islands decision in recognizing Taiwan is in conflict resolution to the UN Resolution
2758. Taiwan will never become an independent nation. Solomon Islands decision to wedge a
diplomatic relations to PRC is in line with UN Resolution 2758 on Taiwan, in compliance with
international law, consensus, and norms upheld by all nations.
c) The Belt and Road initiative and global partnership: To date, more than 160 countries and
International organizations have signed Cooperation agreements with China. The BRI is the
framework that China will collaborate and cooperate with Solomon Island upon establishing
relations with China.
d) The BRI can help Solomon Island to implement its National Development Strategic plans 2016-
2030. Currently, only China has such an initiative for its bilateral friends. None of our
traditional partners has its equivalent.
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I. The Chinese government has clearly advised that once bilateral relations is established,
Solomon Island and Chinese government will sign Development Cooperations and
Agreements.
V. Sectoral support: China has clearly outlined the sectors that it will start helping Solomon Islands
with:
• Constituency Development Fund (CDF),

• Government Scholarships,
• 2023 Games,
• sports,
• trade,
• markets,
• investment
• infrastructure,
• agriculture,
• tourism,
• fisheries,
• Minerals.
VI. The BRI prioritizes infrastructure. Since independence, the challenge in respect to
infrastructure remains our biggest obstacle. Even the response to the Townsville Peace
Agreement bona fide claims (pp. 33-34) make reference to the government constructing 5
infrastructure projects (paragraph 2(d) part 4) for Malaita and Guadalcanal. But they have
remained elusive. These projects can be aligned under BRI for Solomon Islands.
This, China initiative, holds the only means to solve this national development issue as it has
done for other countries, including countries in the Pacific region.
VII. China Foreign policy, Development and Diplomacy has a philosophy: China’s development
philosophy is to encourage development that is innovative, coordinated and openly shared. It is
targeted at diffusing risk, poverty alleviation, and pollution. It allows countries to choose for
themselves. China wants respectful partnerships and don’t set conditions for their assistance as
others have done in Solomon Islands.
VIII. The future is an opportunity – Now: The above case studies and discussions with the Taiwan’s
Vice Foreign Affairs and China’s Vice Foreign Affairs Minister, indicated that our relations
with Taiwan would not address our ailing infrastructures. We must make a decision for the sake
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of the country and its future. The Chinese government has made it clear that it wants to assist
Solomon Island develop. It has offered an opportunity for Solomon Islands people and its
government.
IX. Solomon Island must make the shift! It is the right foreign policy engagement.
This elected government has the responsibility to prepare their country for the future. Not the
future that is in the next 10 or 20 years, but for the next 100 years. And this will mean making
tough choices – now!
8. TRADE ANALYSIS
Over the last decade, PRC has emerged as an important power in the South Pacific region. This is the
result of its expansion in trade and economics, aid programs, and diplomatic initiatives (Zhang, 2015).
China’s BRI is one of President Xi’s most popular foreign and economic policies. It aims at
strengthening Beijing’s economic leadership through a vast program of infrastructure building. This is
China’s 21st century Silk Road initiative.
China has used BRI to strengthen economic cooperation with partner countries. It aims to leverage its
declining economic growth and to open up new economic fronts. The idea is to mitigate its excessive
manufacturing capacity at the domestic level. It intends to migrate surplus factories overseas.
One of the least understood aspects of BRI is China’s desire to export its technological and
engineering standards. Chinese policymakers see it as crucial to upgrading the country’s international
standing.
China’s BRI has proven to be the catalyst for trade expansion in the region. The trade relationship
with between china and region have grown over the last past decade. China’s market presents a huge
boon for Pacific Island Countries.
Investment and development assistance together with loans are vital for improvements in transport
and infrastructure. This is evident as PNG and Fiji. They are the first Pacific Island countries to sign
up to the initiative. Besides trade opportunities, there is increased inflow of Chinese aid money into
PICs economies.
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8.1 PAPUA NEW GUINEA
Exports:
The total value of exports for PNG in 2017 is around USD$8.9 billion. Of this, USD$1.94 billion
exports to China. PNG is the largest trading partner for China in the PICs.
PNG’s main exports are: petroleum, natural gas, gold, copper ore, crude petroleum and rough wood.
PNG has seen an increase in export value to China over the recent years. This due to the export of
petroleum, natural gas and rough wood.
Although the export value is significant, this is a decrease of -1.3 percent at an annual rate from the
USD$9.5billion in 2008 to USD$8.9billion in 2017.
Imports:
PNG’s imports from China is USD$768 million from a total of USD$3.55 billion (22 percent of total
imports). This mainly machines and metals. PNG is one of few PICs that have a positive trade with
China. This is due to its broad export base and LNG gas.
8.2 FIJI
Exports:
Fiji export to China is valued at USD$59.82 million. This constitute around 4 percent of its total
exports.
Fiji is among the best performing PICs in recent year. However, its economy remains vulnerable. It
relies very heavily on its sugar industry, travel and tourism, and fishing industries. This makes up its
most important source of foreign exchange.
Fiji is among the first countries in the region to reap the benefits of BRI. Fiji has tapped into the
massive Chinese tourist market. According to UNTO, in 2015, Chinese tourist arrivals into Fiji have
increase by 41 percent. This was after China and Fiji have signed their Trade and economic co-
operation.
Imports:
In 2016, Fiji has a total imports of USD$2.44billion. Of this, USD$386M (16 percent) comes from
China. Fiji main imports include machines (20%), and metals (15%) respectively.
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8.3 SAMOA
Exports:
The value of Samoa’s exports to China is only USD$507, 000. Its total value of exports is
USD$65.5million. Samoa’s traditional trading partners are: Australia, American Samoa, New
Zealand, and the United Kingdom.
Samoa’s main export to China are fish and noni juice. This however, noni juice remains at an
embryonic stage. Since Samoa has signed the BRI, this has changed.
Imports:
Samoa’s import from China is worth USD$43.1 million. This are mainly made up if coated flat rolled
iron and merchandise goods.
8.4 VANUATU
Exports:
Vanuatu’s exports to China is at USD$42.5M (around 21 percent of its export value). Vanuatu’s main
exports are non-fillet fish, tug boats, copra mollusk and perfume plants. This reflects heavy reliance
on China’s market. Like other PICs, the economy relies mainly on agricultural commodities with very
little value added products.
Imports:
Vanuatu relies heavily on China for its imports. In 2017, Vanutau’s total import was valued at
USD$65million. Out of that, 27% of it is from China mainly from: refined petroleum, iron structures
and telephones.
8.5 SOLOMON ISLANDS
Exports:
Solomon Islands total export to China is valued at USD$456M (66 percent of all export value).
Solomon Islands main export commodities to China are logs and wood products. China is Solomon
Islands biggest export market. This is due to demand for round log in China. This indicates a heavy
reliance on certain export commodities as well as a very narrow export base.
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Imports:
Similarly, the trend for imports by origin also indicate that Solomon Islands China remains a
significant trading partner. The value of imports from China is around USD$79.1million. This is
mainly petroleum products.
8.6 TONGA
Exports:
In 2017, Tonga’s total export is USD$15million. With that only $549,000 (around 3.7 percent of its
value of exports) to China. Main export commodities to china include wood products and vegetable
products. Tonga main exports are vegetables, animal products and food stuff.
Imports:
Tonga’s total import is USD$103M. With that, $549,000 (3.7 percent) comes from China. Tonga’s
main import from china is made up of machines, metals, plastics and rubbers.
8.7 PRC – ROC TRADE
Despite PRC-ROC rivalry, economic ties between the Taiwan and China have thrived in recent years.
Yet political frictions still shadow the relationship. China and Taiwan have experienced renewed
tensions (Council on Foreign Relations, 2019).
Taiwan’s total imports in Jul 2019 is USD$23.4 billion. This is compared with USD$25.0 billion in
the previous month.
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9. DEBT ANALYSIS
9.1 Solomon Islands.
In 2018, Solomon Islands public debt is SBD$97.28 million (10% of debt to GDP) compared to
around 8% debt to GDP in 2017. Solomon Islands main bilateral creditor is Exim Bank loan (ROC),
which is valued at 8 percent and EU at 1 percent of the total debt.
Solomon Islands main multilateral creditors are: IDA, ADB, IMF, and IFAD at 29, 36, 5 and 1
percent of public debt, respectively. The increase in government debt is driven by infrastructure
spending. The debt management strategy sets the limit for debt to GDP ratio at 35 percent.
Current additional Issues to Consider.

A. SIG Budget capacity not able to accommodate further debt repayment.
B. SIG inability to service the current debt of USD$90million equivalent to SBD$720million.
C. Ministry of Finance & Treasury capacity to handle any further debt repayment.
A. SIG Budget capacity not able to accommodate further debt repayment.

• Issue: The Current SIG 2019 annual budget of SBD$3.962billion, including budgetary support
from donors, with Taiwan contributing SBD$70 million. This indicated that SIG revenues will not
support any further loans should the current approach is to obtain further borrowings including
concessional loans from China. The current annual budget 2019 component is total payroll
estimates under the re-current expenditure SBD$1.244 billion and total other charges estimates also
under the recurrent expenditure is SBD$1.906 billion, and total development (capital) expenditure
estimates is SBD$545 million. The re-current expenditure estimates can only accommodate the
existing debt repayment of SBD$720 million due to Exim Bank, therefore, the SIG cannot accept
any additional loans.
• Response: The existing revenue earning capacity of the SIG is sufficient to cater for additional
borrowings including any concessional loans obtained from China. The SIG losses huge revenue
from uncollected imports and exports taxes through inadequate capacity to monitor and thoroughly
evaluate customs and boarder entries. This requires an urgent review of imports and export entries.
The SIG must set up a Taskforce to put in place a monitoring system to capture all imports and
export entries, existing tax remissions and exemptions. This systems requires collaboration between
CBSI, Customs, Ports Authority, POB, ANZ and BSP. This ensures that all exports receipts from
goods and services exported are monitored and collected. This ensures that export and import taxes
44 | P a g e

due to the SIG is collected at the main points of entries. The estimated loss of revenue to SIG is in
billions of dollars through unmonitored exports, imports, tax exemptions and remissions.
B. SIG inability to service the current debt of USD90m equivalent to SBD$720m

• Issue: Exim Bank loans to DBSI & SIG infrastructure current highway in Honiara. Taiwan assisted
SIG to repay the Exim bank for infrastructure highway from Henderson to White river. The SIG
revenue capacity cannot accommodate further borrowings including any concessional loans from
China. Also, SIG has a poor history of debt servicing from World Bank and IMF.
• Response: The current SIG approach and strategy is to utilize a proposed grant aid support from
Beijing during its transitional phase for five years from 2020 – 2025. China has pledged its grant
aid support to assist Solomon Islands. This includes RCDF, PG 2023, Health & Education,
infrastructure and other support services.
C. Ministry of Finance & Treasury capacity to handle any further debt repayment
• Issue: The existing capacity within the MoFT cannot handle and manage debt repayments and
monitoring of additional borrowings. Also, the current payments and disbursement processes and
systems is unmonitored and abused by officials with the Ministry, therefore funds expended are
misappropriated and mismanaged. This indicated the abuse and manipulation of the payment and
procurement systems within the Ministry of Finance by officials and suppliers. Therefore, there is
lack of transparency, trust and confidence of the entire SIG financial system.
• Response: The SIG must urgently review and improve the current payments and procurement
systems. The proposed SIG Taskforce will immediately review and put in place improvements
within the current financial system to instil trust and confidence within the Finance Ministry.
• An overall strategy to deal with debt servicing, monitoring, evaluation and reporting: From 1997 to
2002, the late Ulufaalu Government put in place institutions and systems that supported the
Government to repay and monitor debt servicing. The two institutions that were mandated to do
that were the CBSI and Economic Reform Unit. The CBSI is responsible for debt repayment and
debt servicing whilst the ERU is tasked to do the monitoring, evaluation and reporting of the overall
debt situation. The operational day to day revenue collection, recording and upkeep is done by the
Ministry of Finance. The daily revenues collected are deposited into a SIG account at CBSI, the
CBSI then deducted 20% (or a new formula to be determined by the Taskforce) of daily revenue
collection for debt repayment, the remaining 80% of daily revenue collection is then transferred
into the SIG ANZ account for Government payments.
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9.2 SAMOA:
In 2018, Samoa’s total public debt is USD$1.08 billion equivalents to 49.8 percent of GDP. This is an
increase of 0.8 percent compared to the same period in 2017. The main creditors’ composition is
made up of the follows; EXIM Bank of PRC (38.8%), IDA (25.8%) and ADB (22.5%).
9.3 FIJI:
In 2018, Fiji total debt is USD4, 533.6million (44.20 percent of the total GDP); an increase of 2.8
percent compared from the same period in 2017. The increase is owed to increased government
expenditure in infrastructure and agriculture. The main contributors to the portfolio are EXIM China
(36.8 percent) and ADB (24.6 percent).
9.4 VANUATU:
Vanuatu’s public debt rose sharply to 37.6 percent of GDP in 2017 as compared to 30.5 percent in
2016. This spike is driven by increased spending from bilateral creditors which was used for
infrastructure expenditure.
For the first time, bilateral creditors have surpassed multilateral source of funding which saw the
emergence of Chinese influence. Vanuatu’s main bilateral creditors are China EXIM Bank (46
percent) and JICA (25 percent). Its main multilateral creditors are IMF, ADB and IDA (combined
total of 28.7 percent).
9.5 PNG:
PNG total public debt in 2018 is 36.9 percent of the GDP. The Ministry of Treasury has confirmed its
smooth managing of the debt repayment in a timely manner. In fact, there is ongoing consultations
with the PRC indicating possibility to refinance its current debt.
9.6 TONGA:
Tonga’s total debt in 2015 was estimated at USD $422.6m (51.5% of GDP), with External debt at
$381.6m (46.5%) and Domestic debt at $40.98m (5.0%). The huge increase in external debt was
mainly due to disbursement for CBD and roads as well as appreciation of the CNY currency.
Main external debt creditors are: EXIM at $250.3m (66%), and ADB at $61.4m (16%). During the 5-
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year period, there was an increase of $106.0m in the DOD to EXIM as result of disbursements for
CBD and Roads.
Debt is a problem in the Pacific Island Countries. Six PICs are at high risk of debt distress: Kiribati
(as of 2017), Marshall Islands (as of 2018), Tuvalu (as of 2018), Micronesia (as of 2017), Samoa (as
of 2018) and Tonga (as of 2017) (Fox and Dornan 2018). Another three PICs have moderate risk:
Papua New Guinea (as of 2017), Solomon Islands (as of 2017) and Vanuatu (as of 2018).
9.10 Policy Issues:
I. Debt to GDP ratio is used by investors to measure a country ability to make future payments
on its debt, thus affecting country’s borrowing cost and government bond yields. The trade-
off is there by the cost of increasing expenditure in the current at the expense of future
government spending. This affects the government issued bonds and thereby future
government revenue stream.
II. In the interest of government sustainable debt level, Solomon Islands in a position to increase
its debt level. However, it has to weigh that against its repayment capability.
III. Institute legal framework to ensure prudent borrowing ceiling and repayment mechanisms.
9.11 China Aid:
For comparison purposes, China aid consist of: grants, interest free loans and concessional loans. (See
the summary on the difference of Chinese foreign Aid.)
Table 1: Chinese foreign aid

Type of Finance Chinese Comments
Foreign Aid
Grants Yes
Interest – free loans yes It can be forgiven
Concessional see China Exim Bank
loans details • interest rate 2% to 3%
below • 15 to 20 repayment years,
including 5 to 7 years’ grace
• must be repaid.
Examples:
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i. University of Goroka dormitory construction (2011–14);
phases 2 to 4, US$45.9 million (RMB 294 million), China’s first concessional loan project
in Papua New Guinea.
ii. Reconstruction of Central Business District in Nuku ‘alofa, Tonga (2008–12), US$68.7
million (RMB 440 million).
Commercial loan schemes No i. China Exim Bank
ii. China Development Bank
iii. Agricultural Development Bank of
China.
i. Export buyers’ credits.
ii. China–Africa Development Fund, the Special Loan for
the Development of African Small and Medium-sized
Enterprises, Fund for Development Cooperation between
China and Portuguese-speaking Countries, Special Fund
for Infrastructure Development in Pacific Island countries
etc.
iii. Loans to support large overseas agricultural projects.
Source: Zhang, (2018)14
Not all Chinese aid is free
Chinese concessional loans cannot be written off or turned into interest-free loans. It cannot be
ultimately written off.
Chinese aid and loans appeal to recipient governments. It has fewer conditions attached. It has a faster
approval rate.
Chinese contractors, especially the state-owned enterprises (SOEs), bid for infrastructure projects in
recipient countries at competitive prices. They can easily access Chinese concessional loans to
implement these projects.

14
Zhang, Denghua. “Chinese Concessional Loans Part 2 — Pacific Indebtedness.” Department of Public Affairs, 2018,
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Figure 1. Debt in selected Pacific Island Countries
Figure 2. Debt distress by Countries

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10. ANALYSIS- VARIABLES, PESTLE, SWOT, TOW
Phenomena’s ROC PRC Traditional Power (Quads)

Geopolitics • ROC plays by strategic interest of USA, • Poses no security threat to the • Framed their regional interaction on
/Geostrategic Australia and New Zealand. region. geopolitics and geostrategic outlook or
• PRC-ROC rivals influences geopolitics of • PRC-ROC rival influence geopolitics interest.
the region. and strategic outlook.

Foreign Policy • Has diplomatic relations with Solomon • Based on innovative, coordinated • Frame around their security concerns.
Islands. and openly shared. • Return focus to Pacific region.
• Has 6 diplomatic relation in the region. • Non-expansionist • Indo-Asia policy
• Eager to maintain international • Has relations with 8 PICs.
presence.
Aid/Development • Deeply entrenched development • BRI and its component the Maritime • July 2018, the US, Australia and Japan formed
Assistance assistance to Solomon Islands and its Silk Road for the pacific is envious. a trilateral partnership and announced a
allies. • Will consider cdf for Solomon commitment to invest in infrastructure
• Provides budget support and islands. projects in the Indo-Pacific region.
discretionary funds. • 2019 Australia's Pacific Step-Up policy-
Canberra announced Australian
Infrastructure Financing Facility ‘’for the
Pacific, which commits about AUD$2 billion
to infrastructure development in the Pacific
Islands.
Trade • Negligible trade with Solomon Islands • Positive trade balance with • Combined constitute substantial trading with
and its allies in the region. Solomon Islands. S.I.
• Largest single trading partner for
S.I.
Infrastructure • Has no plans for major infrastructure • Potential huge partner for • Traditional partner in infrastructure
development. infrastructure development. development.
• Targeting economic and social
infrastructures.
Investments • No investment plans. • Constitute huge potential for • Traditional investment partner.
investment opportunities.
Loans • S.I has existing Taiwan Exim Bank loan. • Potential for S.I to borrow from its • Command huge loans to S.I through
PRC Exim Bank. multilateral arrangements.
Rural Development • Directly support Constituency • Potential to builds infrastructure to • Build schools and clinics in rural communities.
Development Fund. support rural development. • Have grassroots projects.
• Rural developments happen in • Project based rural development.
isolation. No infrastructure for
connectivity.
• Direct approach to individuals for rural
development.
Local Politics • Has huge bearing on influencing • Has the potential to influence • Generally the key-turners.
domestic politics of host countries. domestic politics. • Has leverage in S.I politics.
Local Perception • Mix reactions as to how people view • Received with mix reactions due to • Received with mix reaction within local
Taiwan. lack of effective PR. communities.
• CSO Solomons recently render support • View from cold war lens and • Schooled populace resent their strategies and
to S.I. mentality. tactics.
• Schooled populace resent its handout
policies.
Corruption • Very aggressive in aggravating • No evidence of facilitating • Wants to be perceived as champions of anti-
corruption. corruption in S.I or other corruption.
neighbouring countries.
Land • No significant involvement on land • Chinese Citizens have tract record • Land grabbing in the past.
issues. of meddling with land lands and •
related issues.
Law
Whole sale and • No evidence of Taiwanese in majoe • Dominated the wholesale and retail
retail wholesale and retail business. sector.
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Travel/Tourism • No plans for reciprocal tourism • Have huge potential for tourism • No. 1 source of tourism earner for S.I.
development. development. Constitute tourism influx into S.I
Debt • S.I.G has existing loan to Taiwan Exim • Debt trap diplomacy debunked. It is • No.1 creditors to PICs through
Bank not accurate the information multilateralism.
people consume.

10.1 PESTLE Analysis
Solomon Islands
Political • Democratic
• Multi-party
• Coalition of 4 parties
• Our Party largest but loyalty is fluid.
• Partially stable, some cabinet members pro-Taiwan
• Policy to review relations with ROC with potential to normalize with PRC.
Economical • Weak economy
• Moderate debt stress
• Potential to borrow
• Potential to grow
• PRC is SI’s largest trading partner
• SI has negligible trade with ROC
Social • People’s opinion and position split on the issue.
• Civil Societies support Taiwan at parliamentary Foreign Relations Committee
• Majority of Populace in rural communities have no idea on the matter.
• Newspapers/Journalist writing on issues they do not understand
• Uncensored Social media
• 600,000 population
Technology • Lags in technology, however, is catching up.
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• 4G telecommunication
• Fibre optic/High Speed internet soon
• Politicization of fibre optic cable
• Australia controls SIG-ICT network
Legal • After normalization institute Sino-SI act of Parliament.
• Need for review on relevant law, legislations and legal frameworks.
Environment (Natural and Geopolitical) • Climate & location conducive for large scale investments.
• Vulnerable to climate change and natural disasters.
• Great power rivalry in the pacific.

10.2 SWOT Analysis
The ‘strengths’ and ‘weakness’ aspect of this SWOT analysis examines internal factors within Solomon Islands. These are factors we as a country have
control over. On the other hand, ‘opportunities’ and ‘threats’ examines external factors. These are factors we cannot control which are directly related to
PRC and ROC in relation Solomon Islands.
STRENGTHS OPPORTUNITIES
(Solomon Islands) (External-PRC&ROC)

• Member of UN family China
• Member of PIF and MSG • At the UN level, China is a permanent of Security Council and
• Parliamentary Democracy advocators for third world issues.
• National, Provincial and Community governances • China support for S.I initiative and agenda at UN and other
• Strong legal system international forums. Eg. climate change
• Under security umbrella of USA ( Allied with the West) • Take advance of China’s global sphere of influence and initiatives.
• Of strategic location and interest to US allies. • BRI/ Maritime Silk Road envious.
• 2nd to PNG in terms of natural resources - Boost export to Chinese market
• Economy has potential to grow. Vast resources yet to be tapped. - Boost inflow of Chinese FDI
• Debt in moderate level • Chinese Aid, grants, interest free loans and concessional loans.
• Diversity of cultures and traditions • Support for 2023 Pacific Games
• Youthful country. More than half of population are youths. • Roads, bridges and wharfs (Economic) infrastructures.

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• Bilateral cooperations agreements. Eg. In law enforcement and
intelligence sharing.
• People to people contact though Friendship Associations.
• Scholarships and education training.
• Huge tourism market

Taiwan
• Democratic system of governance
• Education and training
• Support for RCDF
• Support for National Referral Hospital
• Agriculture technical mission
• A US ally
WEAKNESSES THREATS
(Solomon Islands) (External-PRC&ROC)

• Vulnerable to external shock. Exchanges rates and commodity prices.
• High unemployment, job scarcity, high crime rate and weak law • Geopolitics and power shifts.
enforcement.
• Breakdown of cultural values and norms. China
• Economy dependent on logging. Logging industry declining. - Difference in political systems
• Small industry base. - Lack of understanding of China
• Vast resources still untapped/underutilized. - Managing it will be a challenge
• Lack of incentives for empowering indigenous people - China’s rivalry with US and allies
• Fragility of political system. Fluidity in coalition arrangements. - Economic power can overwhelm S.I’s small economy.
• Lack of understanding China.
Taiwan
- Is not a UN member, cannot support our agendas at UN
- Chequebook diplomacy
- Aggressive lobbying to MPs, institutions and civil societies.
- Cannot support S.I in major international forums.
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- Uncertainty on unification with PRC (implication on Solomon
Islands)
- In debt to Taiwan Exim Bank

10.3 TOW Analysis
INTERNAL FACTORS

STRENGHTS (S) WEAKNESS (W)

Strenghts/Oppotunites(SO) Weaknesses/Opportunities (WO)
(strengths to exploit opportunities.) (overcome weaknesses, and then take advantage of
opportunities. Mitigate weaknesses, to exploit
• S.I as member of regional and global
EXTERNAL FACTORS
opportunities.)
institutions. Engaging with China is the
way forward. • Inflow of FDI, will create jobs, address
• Our governance system and values can unemployment and crime rates. Benefit
be accommodated by PRC’s system due to our youthful population.
to their PF of non-interference • Alignment with BRI will help in
• As an ally of US, we have security maximizing untapped resources,
guarantee. China has no expansionist diversify economic base and boost
OPPORTUNITIES policy.
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• Aligning with China’s BRI will help S.I SMEs. This will also empower our
maximize its long term economic indigenous people.
interests. • Through education and professional
• With our current debt level, there is capacity training, we can learn from
potential for further borrowing and Chinese lessons to address our political
refinancing. fluidity and systems.
• Our diversity as unity can be harnessed
through people to people exchanges
with PRC and ROC.

Strengths/Threats (ST) Weaknesses/Threats (WT)
(exploit strengths to overcome any potential threats.) (using weakness to overcome a threat? With
Weakness/Threat (WT) strategies one is attempting to
minimise any weaknesses to avoid possible threat.)
• As member of regional and international

institutions, SI with PRC’s support can
• With our social issues: youthful
cushion off threats for other countries
population, unemployment, and high
and powers.
crime rate and job scarcity. SI to
• There is no evidence to prove that our
address our issues and mobilized to
(SINO-SI) different governance and legal
capitalize on the unknown economic
systems cannot coexist. In fact SI stand
power of China.
to benefits to learn from China’s
• With SI’s weak economy and heavy
effective system.
THREATS reliance on logging. SI to invite China
• Being of geostrategic interest and under
US security umbrella. SI can balance off economic might to diversify the
economy.
or mediate SINO-US rivalry in the region.
• Our weak and fluid political system can
• Despite having rich natural resources
and untapped wealth, S.I is still be used as strategic ambiguity policy to
vulnerable to external shocks. PRC can leverage our position ouselves in
cushion off such externalities if S.I trades geopolitical rivalries and power shifts.
in Chinese Currency. Chinese being SI
largest trading partner and Chinese Yuan
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(Renminbi) being included in IMF Special
Drawing Rights (SDR).
• With our moderate debt level, S.I can
borrow from PRC to refinance its Exim
Bank debt with ROC.
• SI’s strength in its diversity and youthful
population must be educated to
understand the Chinese people and
cultures.

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11. SUMMARY OF OBSERVATIONS
11.1 UN Resolution 2758
UN Resolution 2758 of 1971 adopted by the United Nations recognized PRC. Not ROC.
Since 1971, countries have switched diplomatic relations from ROC to PRC. Currently 178 countries
world-wide including United States (US) Australia and New Zealand have recognized PRC, while only
16 countries recognized ROC. Solomon Islands is one of the very few countries still recognize ROC,
while the majority have recognized PRC.
11.2 Support for ROC membership at the UN
Solomon Islands diplomatic relations with ROC must be reviewed in light of the UN Resolution 2758
adopted in 1971. The UN Resolution 2758 of 1971 has settled China’s membership at the UN.
In this context, there may not be a chance for ROC to be admitted as a UN member.
11.3 Solomon Islands UN Membership in 1978
In 1978, Solomon Islands requested UN membership. China was one of the Five Permanent Members
of UN Security Council that endorsed Solomon Islands UN membership.
China’s membership in the UN Security Council, position and influence at the UN, must not be
underestimated. Its support for developing countries at UN is tremendous.
China’s support for Solomon Islands, as a member of the UN Security Council, was important.
11.4 Diplomatic Relations in the Pacific
A majority of the countries visited have diplomatic relations with PRC. They have since maintained the
One China Policy.
There are frequent exchanges between these countries and PRC, aimed at strengthening their relations
and their bilateral interests.
11.5 Major Global Political and Economic Power
PRC is a major global and economic power. As the second largest economy in the world, PRC outplays
ROC in international diplomacy and diplomatic relations. It is a member of the UN Security Council,
and is a promoter of multilateralism as well as a defender of least developing countries.
It has overtaken Japan as the second largest contributor to the UN Regular Budget. It is also the second
largest contributor to the UN Peace Keeping budget.
Our pursuit of diplomatic relations with PRC will be an asset for Solomon Islands.
11.6 Traditional Powers Reaction
The traditional donors do not oppose Solomon Islands engagement with PRC. They welcome such
engagements, given the growing influence and role of PRC in the region. As an independent sovereign
nation, Solomon Islands is free to make its own sovereign decisions.
The traditional partners, including the US, have expressed readiness to support Solomon Islands in the
management of its relations with PRC.
11.7 Economic and Trade Relations
Normalization of diplomatic relations with PRC and adherence to the “One China Policy” are
prerequisites for economic and trade assistance to Solomon Islands.
Under China-AID are grants, Interest free loans, and concessional loans, based on interests and
requirement of member countries.
11.8 Solomon Islands Largest Trading Partner
Solomon Islands largest trading partner is PRC. In 2018, Solomon Islands exports and imports to PRC
was USD$630 million. The figure is expected to rise in the coming years.
11.9 Limitation of ROC Funding
In the last thirty- six years (36), ROC has provided around USD$460 million to Solomon Islands in
various forms of assistance. However, ROC’s funding was limited. It does not cover wider areas.
11.10 Infrastructure Development
PRC invests a lot in infrastructure developments compared to ROC. As witnessed in other countries,
PRC has engaged a lot in building infrastructure, roads, wharves, bridges, government buildings,
schools and sports stadiums. This is an area ROC lacks and cannot compete with PRC in the region.
11.11 Different Levels of Assistance
Unlike ROC, countries with diplomatic relations with PRC can access funding and assistance at
different levels. This include funding at the national, provincial and community level.
This provides an opportunity for Solomon Islands provinces to enter into sister relationship with
relevant provinces and cities in China.
11.12 Education and Training
PRC supports up to two hundred (200) scholarships for each Pacific Island country to study at various
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Universities in China. At the recent APEC summit in Port Moresby, Papua New Guinea in 2018,
Chinese President Xi Jing Ping had announced up to 2,500 scholarships for Pacific island countries that
have diplomatic relations with PRC. This has recently been raised to 5,000 scholarships.
Apart from Scholarships, training attachments for the Public Service and Private Sector are also offered.
11.13 Sporting Assistance
One of PRC’s strength is in the field of Sports. Prior to the 2019 Pacific Games, Samoa, for example,
has sent its top athletes to train in Beijing. This sporting arrangement has paid off for Papua New Guinea
Pacific Games in 2015, Vanuatu Pacific Mini Games in 2017 as well as the Samoa Pacific Games in
2019.
11.14 Debt Trap Diplomacy
Debt Trap Diplomacy has been raised widely in the mass media. This has affected relations between
pacific island countries and PRC. Contrary to what was reported in the media, these countries have
denied the reports. They are managing their debts according to the laws, guidelines, and procedures.
11.15 Cooperation in Law Enforcement
The presence of PRC will provide an opportunity to cooperate on law enforcement issues. PRC
Government can assist Solomon Islands government to ensure its citizens respect the laws of the
country.
For example, in 2017, through intelligence sharing, Chinese law enforcement agencies arrested seventy-
four (74) Chinese criminals in Fiji. They were extradited back to China.
11.16 Security Challenges
Mass media reports that China’s presence in the region is a security threat. Based on evidence received
all countries consulted have denied reports of China’s military ambitions in their respective countries.
11.17 Regional Support
Our Pacific neighbours, traditional partners and regional institutions, have expressed support for the
decision taken by SIG to review its relations with ROC and PRC. Whatever decision is to be made by
Solomon Islands shall be a sovereign decision based on its long term strategic interests. There may not
be any backlash in the event we switch.
11.18 Gap Analysis
China’s Vice-Foreign Affairs Minister stated that in the event of normalizing relations, PRC shall fill-
in gaps left by ROC.
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This includes assistance in scholarship, (including transiting students from Taiwan to China), support
for rural constituency fund (RCDF), assistance with the Pacific Games 2023, and other short term,
medium term and long term needs.
11.19 Managing our Relations with PRC
Solomon Islands has the benefit of hindsight learning from countries consulted. Hence managing our
relations with PRC will be a priority after normalizing relations.
11.20 Solomon Islands Long-term Strategic Interest
Whatever decision the country takes must be looked at from a long term strategic perspective. In this
regard, PRC can better support Solomon Islands to address sustainable peace and stability through
infrastructure development stipulated in the Townsville Peace Agreement bona fide claims (page 33
and 34). This also includes the outstanding claims from Police, Nurses and Teachers served at the border
during the Bougainville crisis.
11.21 Fears in Solomon Islands debunked.
1. China is Communist.
Yes it is correct that China is a communist country. China is a One-Party state. It is run by the
Chinese Communist Party.
But to view modern China using the Cold-War lens is preposterous. Besides political reforms, PRC
has moved from socialist economy to embrace the market economy. Since late 1970s and early 1980s
it has opened up to the outside world attracting huge investment.
China today is not the China portrayed by our high school (or Form IV) social science text book. Nor
is it anywhere new the propaganda perpetuated by western governments, institutions and mass media.
2. China Human Rights Abuse

The western mass media as tools of western governments shall never report of progress China has
achieved regarding human rights. China’s human rights record is better than that of USA, UK,
Australia and NZ.
China is a big country with around 1.4 billion people. To govern and manage such a country is not a
task for the faint of heart. There has to be tougher stance and measures imposed to have order, peace
and prosperity.
Here are some simple questions guiding the task-force’s research.
a) When was the last time the world has seen China invade another country?
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b) When was the last time the world has seen China destroy an entire country, its economy, its
government and people and its entire social fabrics.
c) When was the last time the world has seen China destroy an entire region to ruins?
The simple answer is : NO. Hence, having right answers to the above question shall frame one’s
mindset to the guiding principles of Chinese foreign policies and its peaceful rise.
It is the work of so-called beacons of democracy to invade and destroy other countries. It their task to
destroy people’s livelihood, steal their resources and leave in ruins.
3. Our Christian Value will be compromised

There is no evidence that having relations with China will compromise our religious freedom and our
Christian Values and Principles. Not a single country out of the 178 that have diplomatic relations
with experience such from Beijing. China respects sovereignty and territorial integrity of other
countries.
Permit worship.
4. Chinese people will invade us

This is again another unfounded and baseless scare-mongering tactic. With or without diplomatic
relations, we have influx of Chinese business people. There is a distinction to make regarding ‘China’
as a country and government and ‘Chinese’ as a people. It is us, it is ourselves that need to put our
country in order and enforce our laws and regulations.
So there shall be NO invasion from China. In fact the opposite is true. Having relations with China
shall allow our government agencies to work with Chinese government agencies to track down illegal
Chinese citizens in the Solomon Islands.
5. Reason to have diplomatic relations with Taiwan when we have the choice in 1983 was
based on Democratic and Human Rights Values and principles.
The answer to that is simple not TRUE. Taiwan back then was not a democratic nation. Freedom of
expression, freedom of religion, media outlets and freedom of association were all suppressed.
Torture and unlawful arrest is the rule of the day.
To say that our forefather back then based the decision on freedom and democratic principles is
simple not true. It was not only after 1987 Taiwan started to embark on reform. They held their first
election in 1991.
The consideration is on money power. In the 1980s, Taiwan was economically superior to China. Our
decision to have diplomatic relations with Taiwan was bought.
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12. RECOMMENDATIONS
In the discussions and observations, the Committee was given two options to look at and offer
recommendations. First is to remain with Taiwan/ROC
12.1 Remaining with Taiwan/ROC
If the decision is to remain with ROC, then we have to engage ROC at a level higher than the current
one. This means that ROC has to increase its bilateral assistance to Solomon Islands.
ROC has to venture into other areas so that Solomon Islands could maximize benefits from the relations.
12.2 Limitations.
However, the limitation that the Committee can foresee is that ROC may not be able to do so as it has
reached its limits. ROC’s relations with its remaining allies may change.
Our continued support for ROC UN membership will face setbacks. An increased majority of UN
member countries recognize PRC. Not ROC. Our continued support for ROC UN membership will not
succeed.
12.3 Challenges for Future engagement.
The challenges to our continued future engagement with ROC may be out of touch to the current
international norm and protocols which recognize PRC. There is question over our relations with ROC
in light of China’s ascendance.
Solomon Islands international relations and diplomacy is at a cross road. We have to make adjustments.
Our diplomatic relations must be pragmatic, useful and relevant now and in the future.
Prospects for reunification between PRC and ROC will affect our relations with ROC.
Globally, only sixteen (16) countries recognize ROC. Solomon Islands is the only Melanesian country
amongst them. In the last two years, four countries have switched diplomatic recognition from ROC to
PRC. The challenge for Solomon Islands is to maintain space and momentum in this Diplomatic
maneuvering between ROC and PRC.
The challenge for Solomon Islands therefore, is to maintain its international engagement and diplomacy,
relevant and pragmatic, as far as the question of PRC and ROC is concern.
On the reaction from traditional donors as a result of the switch, there will be some impact on the
country and hence the need to review and enhance our engagement with our traditional donors.
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12.4 Normalization of Diplomatic Relations with the PRC
The second option the Committee looked at was the possibility of normalizing diplomatic relations with
the PRC.
By normalizing diplomatic relations with PRC, Solomon Islands will be adhering to the ‘One
China Principle’ which means, severing of diplomatic relations with ROC.
In adherence to “One China Policy”, Solomon Islands stance in the diplomatic recognition with
PRC, will be in line and consistent with international norms and practices, and UN Resolution
2758 (XXIV) of October 1971.
This will be a political and sovereign decision based on Solomon Islands long term strategic interests
and will be decided by Solomon Islands alone. If we are to switch and normalize diplomatic relations
with the PRC, it will provide us with the following advantage:
12.5 Opening new Frontiers
Normalizing diplomatic ties with PRC will open up many frontiers for Solomon Islands never seen in
the forty years of Solomon Islands independence. When we normalize, Solomon Islands will have a
major donor power that it can engage locally with to support its development initiatives and aspirations.
This will add value to our existing diplomatic relations. China will provide us with an opportunity to
leverage, engage and maximize fully and constructively with our diplomatic partners.
12.6 Enhance “Strategic Partnership” with the Worlds Emerging Super power
Normalizing diplomatic relations with PRC will enable Solomon Islands to leverage and enhance its
strategic partnership with the world’s second largest economy.
As a UN member, PRC occupies a pivotal role in the world stage to enhance Solomon Islands UN
agenda. China as a UN Security Council member can also be influential in articulating the interests of
developing countries such as Solomon Islands. Such interests include: climate change, trade and
development issues.
PRC is also a promoter of multilateralism. It is important that developing countries such as Solomon
Islands work alongside China to enhance and promote multilateralism in the global environment.
12.7 Support for S.I Long-term Strategic Interest and Development
Normalizing diplomatic relations with PRC as a key development partner, will ensure support for
Solomon Islands long-term strategic interest and development, as reflected in the NDS.
With PRC’s potential support for our development needs in various technical areas, it will also enhance
our national interests, security, and stability. For the five countries visited, PRC has supported them in
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many areas. PRC has contributed to their socio-economic development, peace, stability, and progress
in their respective countries.
12.8 Maintenance of Global Peace and Security
Normalization of diplomatic relations with PRC will also enhance our collective desire and role to work
together with all Permanent Members of the UN Security (US, UK, France, Russian Federation and
PRC). This will promote and advance global peace and security as enshrined in the UN Charter.
Solomon Islands can now use its bilateral relations with PRC, a permanent member of the UN Security
Council, to push through its UN agenda and seek support from the international community in the
future.
12.9 Challenges and Responsibility
However, if we are to formalize diplomatic relations with PRC, it also comes with challenges and
responsibility.
We are dealing with a totally new entity, which is much larger than any of our existing bilateral partners.
We have to manage our relations well, set the mechanisms and framework in place, and have qualified
professionals and expertise to manage these relations.
At the same time, we have to review and strengthen our various laws such as: investment, immigration,
land, and labor, to ensure respect and compliance.
13. TASKFORCE RECOMMENDATIONS
After weighing the two options, the Cabinet Bi-Partisan Task-force Committee wishes to recommend
to the Solomon Islands government, to consider the following:
13.1 Normalize diplomatic relations with the PRC and sign the Joint Communique to establish
diplomatic relations by mid-September 2019. This must happen before the 1st October 2019, to
coincide with the commemoration of the 70th Anniversary of the founding of PRC.
13.2 Cessation of diplomatic relations with ROC and adherence to the ‘One China Policy/Principle.’
13.3 Invite PRC to establish Diplomatic Mission in Honiara and Solomon Islands in Beijing,
respectively, to advance the bilateral relations.
13.4 The OPMC to develop strategies and framework to execute the new relationship. These include
the following:
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13.4.1 Set up of a Technical Committee based in the Office of the Prime Minister and Cabinet
with relevant expertise to manage the transition from ROC to PRC.
13.4.2 During the transition period, the Technical Committee to consult with the relevant
Ministries and Agencies, manage the changes and facilitate our interests in Honiara and rest
of the country, and in Taipei and Beijing, respectively.
13.4.3 In consultation with relevant Ministries and stakeholders, develop a new policy of
“Strategic Engagement’ with PRC,
13.4.4 Review and enhance our engagement policy with our traditional partners, in view of
the above changes.
13.4.5 After normalization, institute a ‘China-Solomon Islands Act of Parliament’ to provide

legal framework for this new relation.
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14. CONCLUSIONS
The Bi-partisan Task Force has completed its mandated task in reviewing and assessing
the Solomon Islands current relations with Republic of China (Taiwan) and the new
relations with PRC and has provided the best options and strategies to advance the
Solomon Islands future relations forward.
Overwhelmingly, the Task Force has gathered sufficient feedback, information and
evidence regarding the impact of PRC foreign policy, assistance and bilateral funding
support from the Political Leaders, senior Government officials, private sector and
community leaders.
This resulted in enabling the Task-force to acquire in-depth knowledge and information
in assessing the outcome of the current ROC bilateral relations with SI in comparison
with the PRC existing bilateral relations with its Pacific Countries, including Fiji,
PNG, Samoa, Tonga and Vanuatu.
This permitted the Task-force to provide rational recommendations to help the

Government make an informed decision on the ’One China Policy’.
The findings reveal that Solomon Islands stands to benefit a lot if it switches and
normalize diplomatic relations with PRC.
By normalizing diplomatic relations with PRC, Solomon Islands will be adhering to the
‘One China Policy’, and its diplomatic recognition of PRC, will be in line and
consistent with international norms and practices, and UN Resolution 2758 (XXIV) of
October 1971.
It will also open up many frontiers for PRC to support our development initiatives and
aspirations. It also will add value to our existing diplomatic relations and provide us an
opportunity to engage and maximize fully and constructively with all our diplomatic
partners.
With the changing global and geo politics, couple with the rise of PRC, it provides
Solomon Islands, an opportunity to strategically engage with the world’s second largest
economy, and to support our long term strategic interests and initiatives.
While this may bring in opportunities and added value to our relations, the challenge
also for Solomon Islands now is to manage our relations well, set the mechanisms and
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framework in place, and have qualified professionals and expertise manage these
relations.
This will ensure our sovereignty, and national interests are protected.
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15. REFERENCES
“Belt and Road Initiative.” World Bank, www.worldbank.org/en/topic/regional-integration/brief/belt
and-road-initiative.
Chandran, Nyshka. “Taiwan's Fight for Global Recognition Is Unfolding in the Pacific.” CNBC, CNBC,
28 Sept. 2018, www.cnbc.com/2018/09/28/taiwan-china-rivalry-unfolds-in-the-pacific.html.
“China-Taiwan Relations.” Council on Foreign Relations, Council on Foreign Relations,
www.cfr.org/backgrounder/china-taiwan-relations.
Fox, Rohan, and Matthew Dornan. “China in the Pacific: Is China Engaged in ‘Debt-Trap
Diplomacy’?” Devpolicy Blog from the Development Policy Centre, 19 Nov. 2018,
www.devpolicy.org/is-china-engaged-in-debt-trap-diplomacy-20181108/.
“France and Security in the Indo-Pacific .” Directorate General for International Relations and
Strategy, 2019, www.defense.gouv.fr/english/dgris/international-action/regional-
issues/france-unveils-its-defence-policy-in-the-indo-pacific.
“Keohane 1 - Summary Power and Interdependence.” StuDocu,
www.studocu.com/en/document/studocu-university/studocu-summary-
library/summaries/keohane-1-summary-power-and-interdependence/1046641/view.
Lofaso, Vincent. “United States-China Rivalry Will Dominate Geopolitics in East Asia.” Global
Security Review, 8 June 2019, globalsecurityreview.com/united-states-china-competition-
geopolitics-asia-indo-pacific/.
“Real-Time World Debt Clock With Country Comparisons: Who Owes The Most?” Commodity.com,
21 May 2019, commodity.com/debt-clock/.
“Regional Comprehensive Economic Partnership.” Wikipedia, Wikimedia Foundation, 6 Aug. 2019,
en.wikipedia.org/wiki/Regional_Comprehensive_Economic_Partnership.
Shanahan, Patrick M. “Indo-Pacific Strategy Report.” Https://Media.defense.gov, 1 June 2019.
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“World Bank Applies 2009 Debarment to China Communications Construction Company Limited for
Fraud in Philippines Roads Project.” World Bank, www.worldbank.org/en/news/press-
release/2011/07/29/world-bank-applies-2009-debarment-to-china-communications-
construction-company-limited-for-fraud-in-philippines-roads-project.
16. ANNEX
17. APPENDIX
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Report of The Bi-Partisan Taskforce 2019

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1.

Appendix 1 Terms of References

Appendix 2 Schedule of Programs and Visits

Appendix 3 List of people and organizations consulted

Appendix 4 PRC and ROC Allies

Appendix 5 UNGA Resolution 2758

Annex 1 White Paper of China’s Foreign Aid

Annex 2 Why China’s ‘Debtbook Diplomacy’ is a Hoax

ADB Asian Development Bank

The Parliamentary Bi-Partisan Task-force Committee has reviewed Solomon Islands

The Task-force offers the following recommendations and processes:

These recommendations are an outcome of the Task-force’s comprehensive consultation,

3.1 Broader Aims

3.2 Work Plan

(Detailed schedules were annex at the back of this report.)

3 Identify the necessary steps required to switch diplomatic relationship to PRC

3.4 Membership of the Task Force

The following Members of Parliament were appointed to the Team:

Hon Chachabule Amoi MP, Marovo, Government Member

Hon Rex Ramofafia MP, Fataleka, Opposition Member

Hon Titus Fika MP, West Kwaio, Opposition Member

Hon Makario Tagini MP, Baegu Asifola, Opposition Member

Hon Rolland Seleso MP, South Guadalcanal, Independent Member

3.5 Secretariat Staff

The methodology used for this report comprises:

Research and literature reviews on the PRC and ROC.

Team deliberations and discussions.

3.7 Mandate of Task-force

(The full Terms of Reference is in Annex 1 of the report)

5. THE BIGGER PICTURE

Successive US administrations have embarked on their ‘China Containment Policy’ to diminish

5.2 Solomon Islands as a Sovereign Island State.

Particular-intrinsic Derivative Collective

Means (instrument) Threat/Promise to Lobbying, framing, Institutional; ad hoc

6. BACKGROUND TO PRC-ROC RIVALRY

6.1 IMPORTANT TIMELINE

1949: The Separation between ROC and PRC.

1950, Taiwan aligned itself with the United States of America.

1971: Beijing gets UN hold of the UN seat under resolution 275810.

1979: US-Taiwan Relations Act signed.

1987-2016: A period of short reconciliation.

1991: Taiwan lifts state of emergency rule on the Island.

1996: China tests missiles off the coast of Taiwan.

2000: KMT lost power for the first time to DPP.

2005: Beijing adopts anti-secession law towards Taiwan.

2015: President Xi (PRC) and President Ma (ROC) met in Singapore.

2016: End of the honeymoon period

2017: Republic of Panama normalized diplomatic relations with PRC.

7. CASE STUDIES-COUNTRIES VISITED

• The MOU covers following areas:

o Agreement on Economic and Technical Cooperation

• Two AGREEMENTS that are yet to be signed are:

o Fisheries Cooperation Agreement

Results and lessons learned:

• Vanuatu maintain bilateral relationships with the so-called traditional partners.

2. John Robert Simelum Ministry of Finance-Debt Servicing Department

3. Rose Luo China Civil Engineering Construction Cooperation

4. Peter Efeare Melanesian Spearhead Group Secretariat

5. Solomon Islands students USP Emalus Campus

6. Barak Sope Former Prime Minister and Senior Citizen

7. Hon. Jean Pierre Nirua Minister for Education & Training

• On debt trap, Fiji’s government is managing the debt servicing strategy.

Fiji’s benefits from China bilateral relationship