Tonga - China Relations
King Tupou IV gave Princess Pilolevu a mandate in 1996 to normalise Tonga's relations with China. China and Tonga established diplomatic relations in November 1998; and about 500 Chinese live there. On 02 November 1998 Tonga launched it’s so called "Look East Policy", when the flag of the People's Republic of China was raised during a ceremony to formalize the establishment of diplomatic relations between the two countries. Simultaneously, the flag of the Republic of China was lowered, at the termination of Tonga’s diplomatic relations with Taiwan.
Tonga embarked on what became known as its Passport Sales Scheme. Under this scheme Chinese who did not want to live in Communist China could start a new life in Tonga. The scheme went out of control, and the millions that Tonga collected from the sales of these passports were lost because of the mishandling of public funds. The end result was that about 400 Chinese nationals became Tongan citizens. Many of these Chinese immigrants live and work in tiny stores known as “Fale Koloa”, selling basic goods at cheap prices. The Fale Koloa business in Tonga is dominated by Chinese-Tongans.
Riots triggered by a disputed parliamentary reform move broke out in Tonga's capital Nuku'alofa in November 2006, in which eight people were reportedly killed and 80 percent of the central business district destroyed. About 30 Chinese-run stores were looted or burned down. Significant destruction was wrought by anti-government groups that left much of the downtown area in burned ruins. China approved a request from Tonga for concessionary loans to rebuild the central business district.
More than 200 Chinese nationals were airlifted from trouble-torn Tonga on a chartered plane 23 November 2006. Hundreds of Chinese made their way to Tonga's neighboring country Fiji to board an Air China aircraft sent by Beijing.
According to Foreign Ministry spokeswoman Jiang Yu, about 300 overseas Chinese, mostly the elderly, women and children, had sought refuge at the local embassy after their homes and business were destroyed. Foreign troops fanned out across the riot-scarred capital, setting up checkpoints and carrying out patrols after initially securing the airport and other strategic assets.
As the airport in Tonga is not capable of handling planes with more than 250 seats, the aircraft has to land in a Fiji airport. Air China has no commercial flights to Tonga so it has to take a circuitous route covering a total of 21,100 kilometers over nine countries.
To finance the reconstruction of Nuku'alofa, government took a concessional loan from China, the equivalent of $233.3 million Pa'anga, which included $138.9m for the reconstruction of the Nuku'alofa CBD, $91.8m for a road project and $2.6m for the renovation of the now defunct Dateline Hotel.
On October 31, 2009 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, 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.
Mistakenly, many Tongans assumed that the loan would be converted into a grant. It was not - and the subsequent rise in the value of the yuan and fall in the pa'anga has enlarged the debt burden by about 22%. As of 31 January 2015, the kingdom's public debt was 392.6 million Tongan pa'anga ($198 million) -- equivalent to 48.4% of gross domestic product, according to the Tongan Ministry of Finance. Almost all the debt was owed to foreigners. External accounts amounted to 44.6% of GDP. Two-thirds of the debt was denominated in Chinese yuan and owed to the Export-Import Bank of China.
In 2013 China gave Tonga a $15 million 60-seat aircraft made by Xi'an Aircraft Industrial Corp. Amid fears about its safety, New Zealand issued a travel advisory notice, warning its citizens not to fly on the aircraft, and suspended tourism aid until it was grounded. The row damaged Tonga's lucrative whale watching business. After a year, Prime Minister Pohiva suspended the passenger flights, winning the restoration of New Zealand tourism aid.
The leader of the Tonga opposition, Akilisi Pohiva, said 19 December 2013 the country risked being put in a very difficult position as it tries to get China to turn a huge loan into a grant. Pohiva suggests China could ask Tonga to allow it to establish a naval base in the Kingdom.
Sofia Pale reported in 2014 that " China immediately offered the Tongan government to place its naval base in the country. And if it receives consent, this will become the first military outpost of the Heavenly Empire in the South Pacific Region, which will have a convenient location near the French bases in New Caledonia and French Polynesia; near the major U.S. base on Guam; near the shores of Australia and New Zealand; and even “with a view” over Japan."
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