IS CHINA THE PACIFIC’S NEW CHEST OF GOLD?

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Radio Australia Pacific Beat

July 19, 2001 Melbourne, Australia

China’s successful bid to win the 2008 Olympic Games was a potent reminder of what a market of 1.3 billion people represents to possible trade partners.

In Australia, entrepreneurs were over-the-moon about opportunities the Beijing games will provide for those in the construction and consultant industries.

Enthusiasm for deepening links with China through aid and trade is no less evident among economically troubled countries of the South Pacific.

Within the past two years there have been high-level delegations to China from Tonga, the Federated States of Micronesia, Samoa, Fiji, Vanuatu, Kiribati. And the latest to line up in Beijing for handshakes, official toasts and banquets is Papua New Guinea.

Last month Prime Minister Sir Mekere Morauta led a delegation of PNG’s industry captains in search of additional aid and Chinese joint venture partners.

Pacific Beat's Carole Colville has been looking at what came of the visit.

Not surprisingly on his return from Beijing Sir Mekere was delivering glowing reports of the success of the trip, particularly the opportunity to meet the Chinese President and Premier and his success in signing a technical and economic agreement that produced an additional six-point-three-million Australian dollars (US$ 3,187,731) in aid.

Port Moresby lawyer Robert Aisi was invited to join the delegation as the President of PNG's Business Association.

He's slightly half-hearted when you ask about any chest of gold opening up for business.

Chest of Gold

"We’ve had countless numbers of trade and investment groups going to Australia, to Indonesia, to Malaysia. There was one to China a couple of years ago, and a lot of good things were said, but nothing’s followed up," he says.

"Everybody wants to do things. China’s obviously a big market. PNG’s small. But you’ve got to do things that also suit PNG’s capability to provide for a particular market that’s identified."

ANZ Bank’s Managing Director in Port Moresby, Allen Marlin, is used to answering questions from prospective foreign investors, and says their checklist usually varies depending on the sector they’re eyeing up.

"I think the concerns that most new investors would have -- depending on what industry they’re going in to, where land rights might become a major issue in terms of let’s say a mining project or exploration of some description, or the bulk of investors that might be investing in say manufacturing or some sort of business along those lines -- law and order is probably the major significant issue that they face here," he says.

Law and Order

The recent spate of protests in Port Moresby leading to fatal riots has once again dented Papua New Guinea’s law and order record. So how does Robert Aisi see this affecting the trade overtures to China?

"Oh, obviously it has to have some effect. I think that’s the pragmatic view. But we all obviously hope that it doesn't deter people from coming to Papua New Guinea," he says.

Robert Aisi says nobody actually raised the law and order issue with him while he was in China.

"Well there’s Chinese investment here already. I guess everybody checks the place out before they come here," he says.

Investment Innovation

Papua New Guinea’s business leaders have come up with the somewhat innovative idea of forming a holding company to attract Chinese joint venture partners.

But ANZ banker Alan Marlin is more confused than enthusiastic about it in practice.

"Now I don’t even know how something like that would work to be quite honest with you," he says.

"Because you'd think you’d want to invest directly because that would seem to me it's like some sort of partnership or joint alliance arrangement. So we know nothing more than that."

But Robert Aisi says the idea has not died a natural death since the delegation returned, but there's still some fine-tuning before it becomes a reality.

"If it helps PNG in economic terms then I’d like to think that we can support it. I mean the issue you raise about law and order is always going to be an issue unless we deal with our people. . . .We’ve got to try and provide opportunities for employment and things that matter, rather than continuously being barraged publicly about PNG’s law and order situation."

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