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China Grants Economic Aid Package to Pacific Island Allies

China has pledged a multi-million dollar economic aid package to several South Pacific island nations. The Chinese premier announced the package at a regional forum intended to consolidate ties with his country's Pacific island allies.

In Fiji Wednesday, Chinese Premier Wen Jiabao underscored China's commitment to its eight South Pacific allies - Fiji, Samoa, Papua New Guinea, the Cook Islands, Vanuatu, Micronesia, Niue and Tonga.

Speaking at the first China-Pacific Islands economic forum, Mr. Wen promised zero-tariff entry for exports from these countries, more than $370 million in loans in the next three years, debt cancellation for the poorest countries, health cooperation and other incentives.

The South Pacific has been a diplomatic battleground for Beijing and Taipei. But as China's economic influence has expanded in recent years it has managed to gain diplomatic recognition at the expense of Taiwan, which China regards as part of its territory.

But James Chin, a Pacific islands expert at the University of Malaysia Sarawak, says China has several aims in the region beyond isolating Taiwan.

"The Chinese are basically interested in their natural resources and maybe getting support from these countries in international forums," he said. " Other than that, their idea is to make sure that none of these countries switch diplomatic recognition from Beijing to Taiwan. And for those countries which currently recognize Taiwan, their main aim is to basically buy recognition of these countries."

At the forum, Mr. Wen said China's friendship is not a matter of diplomatic expediency but "a strategic decision". He said China has funding and technical expertise while the South Pacific nations have natural resources. Chinese companies have invested heavily in the region's timber and mineral industries.

The six South Pacific nations: Kiribati, Marshall islands, Nauru, Palau, Solomon Islands and Tuvalu, that recognize Taiwan did not attend the forum in Fiji.