An Australian think tank says Beijing has increasingly targeted its South Pacific political allies with its shrinking aid budget as interest wanes in Chinese credit and competition grows with the United States for influence in the region. Sydney’s Lowy Institute reported on Tuesday in its latest annual analysis that Chinese economic influence in the region is losing ground to better loan deals offered by U.S. allies to 14 aid-dependent Pacific Island nations. Strategic competition in the South Pacific has escalated since China struck a security pact with the Solomons Islands last year that raised the prospect of a Chinese naval foothold being established in the South Pacific.
