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China is leasing an entire Pacific island. Its residents are shocked

SYDNEY — The island of Tulagi served as a South Pacific headquarters for Britain then Japan, and during World War II, its natural deepwater harbour across from Guadalcanal made it a military gem soldiers fought and died for.

China is leasing an entire Pacific island. Its residents are shocked

Aerial photo of the coast of the Solomon Islands, showing a log landing area with logs waiting to be picked up by boat.

SYDNEY — The island of Tulagi served as a South Pacific headquarters for Britain then Japan, and during World War II, its natural deepwater harbour across from Guadalcanal made it a military gem soldiers fought and died for.

Now Tulagi is about to move into Chinese hands.

Under a secretive deal signed last month with a provincial government in the South Pacific nation, a Beijing-based company with close ties to the Chinese Communist Party has secured exclusive development rights for the entire island and its surroundings.

The lease agreement has shocked Tulagi residents and alarmed American officials who see the island chains of the South Pacific as crucial to keeping China in check and protecting important sea routes. It is the latest example of China using promises of prosperity to pursue its global aspirations — often by funneling money to governments and investing in local infrastructure projects that critics call debt traps for developing nations.

“The geography tells you that this is a good location,” said Dr Anne-Marie Brady, a China scholar at the University of Canterbury in Christchurch, New Zealand. “China is expanding its military assets into the South Pacific and is looking for friendly ports and friendly airfields just like other rising powers before them.”

Beijing’s ambitions in the South Pacific have economic, political and military ramifications.

The region is rich in natural resources, and China’s investments have provoked worries in the United States and Australia that the projects could give Beijing an opening to establish a military foothold for everything from ships and planes to its own version of the Global Positioning System.

China is also pushing to end the region’s status as a diplomatic stronghold for Taiwan. The Solomons cut ties to Taipei and allied with Beijing just a few days before the Tulagi deal. A second Pacific nation, Kiribati, followed suit the same week.

Even compared to previous Chinese development deals in nearby countries — including a wharf in Vanuatu, whose terms were not publicly released for years — the Tulagi agreement is remarkable for both its scope and lack of public input.

The renewable 75-year lease was granted to the China Sam Enterprise Group, a conglomerate founded in 1985 as a state-owned enterprise, according to corporate records.

A copy of the “strategic cooperation agreement,” obtained by The New York Times and verified by two people with knowledge of the deal, reveals both the immediate ambitions of China Sam and the potential — just as in Vanuatu — for infrastructure that could share civilian and military uses.

Signed on Sept 22, the agreement includes provisions for a fishery base, an operations centre, and “the building or enhancement of the airport”. Though there are no confirmed oil or gas reserves in the Solomons, the agreement also notes that China Sam is interested in building an oil and gas terminal.

These are just the explicit possibilities. The document also states that the government will lease all of Tulagi and the surrounding islands in the province for the development of “a special economic zone or any other industry that is suitable for any development”.

The provincial governor who signed the deal, Mr Stanley Maniteva, could not be reached for comment. Noting that laws and landowner rights would be respected, he told local reporters this week that the agreement had not been completed.

“I want to make clear that the agreement does not bear the official stamp of the province so it is not official and formalised yet,” he said.

But many residents of Tulagi, an island of a little over 1,000 people, are taking the signing of the document to mean it is a real agreement, and outrage has quickly set in.

“They cannot come in and lease the whole island like that,” said Mr Michael Salini, 46, a business owner on Tulagi who is helping organise a petition to oppose the China Sam agreement.

“Everyone is really scared about the possibility of China turning the island into a military base,” he added. “That is what really scares people — because why else do they want to lease the whole island?”

A military installation would carry strategic and symbolic significance. Some American officials believe China’s efforts in the region echo the period before and during World War II, when Japan wrested control of island assets, which were won back in turn by American and Australian troops in bloody battles.

But it is also a matter of feasibility: China goes where there’s value and interest. With the United States pulling back in much of the world under President Trump’s America First policy, Beijing is often knocking on doors left open.

Some American and Solomon Islands officials note that Chinese businesses and officials have cultivated local politicians for years with bribes and gifts like luxury trips to China and Singapore. In a poor country of 600,000 people with a national Parliament of 50 members, it doesn’t take much to tilt debate, they argue.

“What worries me much more about the new Chinese engagement, be it political or economic, in the Pacific is the way in which this engagement is taking place, being lubricated by elite capture and corruption,” said Mr Jonathan Pryke, a Pacific islands expert with the Lowy Institute in Sydney. Though patronage and corruption have long been a challenge, he added, “this engagement has certainly taken it to a whole new level”.

The prime minister of the Solomon Islands, Mr Manasseh Sogavare, visited China earlier this month. Photographs from the trip showed him smiling with China Sam executives.

The visit carried a whiff of victory for Beijing. It followed a failed lobbying effort by Australia and the United States to keep the Solomons loyal to Taiwan and the alignment that began when American Marines dislodged Japanese troops from Tulagi and Guadalcanal in 1942.

Australia’s prime minister, Mr Scott Morrison, visited the Solomons in June — the first official visit by an Australian leader in a decade. He announced an infrastructure program worth up to 250 million Australian dollars, or about US$168 million, in grant financing over 10 years.

Vice-President Mike Pence also pressed Mr Sogavare to hold off on deciding about Taiwan, promising infrastructure investments and making plans for an in-person discussion in September around the time of the United Nations General Assembly.

But Mr Sogavare then announced the severing of ties with Taiwan, and Mr Pence canceled the meeting.

Still, some argue that the United States could revive support.

“It’s not too late in the game,” said Mr Phillip Tagini, a mining executive who served in the Solomons as a prime minister’s adviser from 2012 to 2015. “At this stage we don’t have the history with China to say we can trust them.”

After an election in 2006, rioting and violence broke out amid allegations that money from Chinese businessmen had rigged the results. Protests also greeted Mr Sogavare’s election win in April, with demonstrators marching toward the capital’s Chinatown to register discontent.

“Separate from China’s agenda is the risk of destabilising a vulnerable society,” Dr Brady said.

But the tangible effects of the deals being struck now, some say, could win over even the skeptics.

“The fact is, people in the Solomons are going to see infrastructure from China, and when they see these things happening they are going to say, ‘Wow, this is what we were waiting for,’” Mr Tagini said. “If the Americans are going to come, they need to choose where their impacts are going to be seen. They need to be seen.” THE NEW YORK TIMES

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