ONCE upon a time, if US Federal Reserve chairman Alan Greenspan sneezed, Wall Street caught a cold. Nowadays, if China sneezes, the whole world holds it breath.
That’s how powerful and influential China and its economy have become. Any nation in the world would want to have China at the top of its friend list, and PNG most certainly does.
The importance of this relationship was underlined by this week’s visit of Vice-Premier Li Keqiang, one of China’s most powerful men, who many tip will be the next premier. Leaders of both nations recognise the potentials of their respective economies, and how they could complement each other.
Yesterday, the two countries signed five significant agreements, an event that was described as the “dawn of a new era” in bilateral ties between the two nations.
The signing of these agreements shows the bilateral relationship between PNG and China is healthy and robust and is steadily gaining momentum as more economic, commercial and investment activities take place in both nations.
PNG is China’s largest trading partner in the Pacific and it is anticipated that our bilateral figures will experience a significant boost once appropriate commercial arrangements in the energy sector, such as the liquefied natural gas project, are in place.
The agreements pave the way for China to assist PNG, in a big way, in social and economic development, including a crucial deal announced yesterday for China to purchase up to two million tonnes of LNG annually.
These agreements were concluded after bilateral talks yesterday, between Chinese government officials and senior PNG Government ministers led by Deputy Prime Minister Sir Puka Temu. The agreements illustrate greater economic and technical cooperation where China will provide millions of dollars in grant aid, and create a framework for PNG to obtain concession loans of up to K313 million.
One of the agreements also reaffirms China’s commitment to develop the Chinese-operated Ramu nickel and cobalt project in Madang province. This project is the single largest investment by any country in PNG to date.
For PNG, it comes at time when we are poised for great transformation, as a result of promising developments, the most significant being the PNG LNG project.
PNG is satisfied with the current level of trade and economic cooperation with China and will continue to regard it as a vital market for our exports.
“These relations have been further strengthened and solidified through PNG’s continued adherence to the “One China policy” and through the exchange of visits at leaders, ministerial and officials’ level,” Prime Minister Sir Michael Somare said.
PNG became the 112th country to establish diplomatic relations with China when Sir Michael signed the joint communiqué in Beijing on Oct 12, 1976.
The communiqué asserted PNG’s “One China policy” and has been the cornerstone of the ever-growing relationship between the two nations.
For China, the agreements help fulfil its massive need for energy and other resources as it marches on its way to becoming the world’s second superpower, if it isn’t one already.
China is ranked as PNG’s sixth largest trading partner with a total trade volume of K898.4 million last year. It continues to play an important role in PNG’s development through cooperation in agriculture, housing, defence, capacity building in higher education, health, science, manufacturing and high-tech industries.
These agreements also reflect China’s growing emergence and influence as a force within the Asia-Pacific region and Mr Li said he believed that PNG, as the largest developing country in the South Pacific, had great influence over regional issues.
He affirmed that China and PNG had complementary economies, and there is huge potential for cooperation.
He said China also appreciated the PNG Government’s adherence to the ‘One China policy’.
The mutual appreciation of each other’s positions and the increasing warmth in Sino-PNG relations might not go down well with regional heavyweights Australia and New Zealand, who may view it as a weakening of their own influence in PNG.
But the fact is that China is a force to be reckoned with in the Asia-Pacific region and indeed globally, and it is in PNG’s best interests to pursue its relationship on its own terms for the benefit of its people.