A large concessional loan package currently being negotiated between Papua New Guinea and China is expected to increase China’s influence in the transport, energy and communications sectors in PNG.
According to the government, the 6 billion kina package will be used to significantly reduce energy and communications costs.
As with other large concessional loans, it will mean significant tradeoffs in terms of contracts and foreign labor imports.
China’s increasing interest in Papua New Guinea comes against a backdrop of tensions between the emerging Asian power and its neighbors including Japan.
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