Chinese economic influence among 14 island nations in the region is losing ground because of better loan deals being offered by U.S. allies, especially Australia, according to an analysis by the Sydney-based Lowy Institute.
Focus on the strategic competition in the South Pacific has heightened since China struck a security pact with the Solomon Islands last year.
The U.S. has sought to counter Chinese influence in the region with additional diplomatic and economic support.
President Biden recently hosted Pacific Island leaders at the White House.
China’s overall aid to the island states was $241 million in 2021 — the latest year for which the international policy think tank has comprehensive data.
The year continued a downward trend in Chinese grants and loans to some of the world's most aid-dependent countries. Chinese regional aid peaked in 2016 when it was nearly $400 million.
The latest report revises previous Chinese annual contributions based on additional data but maintains the downward trend.
The decline in Chinese aid has been driven mainly by a lack of Pacific government interest in Chinese loans that have left Pacific countries heavily in debt.
