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China Leases Pacific Island

China leases an entire Pacific island for 75 years

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In News: China Leases Pacific Island

  • A Beijing based company with close ties to the Chinese Communist Party has signed a secretive deal with a provincial government in the South Pacific nation.
  • The deal has secured exclusive development rights for the entire island of Tulagi and its surroundings.
  • The renewable 75-year lease was granted to the China Sam Enterprise Group, a conglomerate founded in 1985 as a state-owned enterprise.
  • It is a Chinese high-tech enterprise, with major business in Oil & Gas, Energy, Minerals, Chemical Investment, Trade, File, Security and in other fields.
China Leases Pacific Island
Map Illustrations.

China Leases Pacific Island
Map Illustrations

Strategic importance of Tulagi Island:

  • The geography of the island underlines the strategic importance of the location, to go with the rich natural resources that the region has to offer.
  • The island of Tulagi served as a South Pacific headquarters for Britain then Japan, and during World War II, its natural deepwater harbor made it a military gem.

Significance for China:

  • China is expanding its military assets into the South Pacific and the agreement will help China in developing ports and airfields in the region, just like other rising powers before them.
  • 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.
  • Infrastructure plans
    • 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.
    • 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.

What are the concerns?

  • The lease agreement has shocked Tulagi residents and alarmed U.S. officials who see the island chains of the South Pacific as crucial to keeping China in check and protecting important sea routes.
  • A military installation would carry strategic and symbolic significance and U.S. believes that China’s efforts in the region are similar to the period before and during the Second World War, when Japan wrested control of island assets.
  • The agreement has provoked worries in the U.S. 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 GPS.
  • It is the another example of China using promises of prosperity to pursue its global aspirations — that has led to debt traps for developing nations.

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