A Beijing-funded wharf in Vanuatu is big enough to allow powerful warships to dock alongside it, heightening fears the port could be converted into a Chinese naval installation. Fairfax Media inspected the $114 million Luganville wharf and was told US coastguard officials and Marines recently visited the sprawling facility and took a keen interest in its specifications. The Chinese and Vanuatu governments have strenuously denied they have discussed a military base…
The Vanuatu government has taken on significant debt to China, though it appears to have stopped taking large loans since getting a stern warning from the International Monetary Fund in 2016. The wharf expected to be used to accept container and cruise ships was constructed by the Shanghai Construction Company and opened with fanfare in the middle of 2017. It is unclear whether the wharf loan contract with the Vanuatu government includes a so-called debt-equity swap clause, which would mean China could take over the facility if Vanuatu defaults on its payments. It has recently taken over the major port of Hambantota from Sri Lanka in these circumstances.
Malcolm Davis, a defence expert at the Australian Strategic Policy Institute, said it was “not by accident” that wharf had been built for large vessels.
“My guess is there’s a Trojan horse operation here that eventually will set up a large facility that is very modern and very well-equipped. They’ve done this before in other parts of the world. “Their hope is that the debt of the Vanuatu government will be so onerous that they can’t pay it back. The Chinese will say, ‘the facility is ours for 99 years’ and the next thing you’ve got a PLA Navy Luang III class [destroyer] docking there.
Excerpts from China and the Pacific: The Great Wharf, Economist, Apr. 21, 2018, at 33.