Australia is the biggest donor of foreign aid in the South Pacific but China is challenging its influence in a region it regards as its back yard, according to research by the Lowy Institute think-tank.
Between 2006 and 2013 Australia provided $6.8bn in bilateral aid to the region, the US gave $1.7bn and China spent $1.4bn. But Beijing is now the biggest overseas backer of Fiji, providing $339.2m to the island nation in the same period while Australia gave $252.2m.
Chinese grants and loans are helping to build roads, schools and other infrastructure in the eight countries with which it enjoys diplomatic relations in the region. Chinese companies are active and are backing the $1.6bn Ramu Nickel mine in Papua New Guinea.
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