China–Pacific trade jumps from $153M to $5.3B – What this means for Vanuatu

June 3, 2025 10:10 pm | Posted in Business News | Share now TwitterFacebook

By Nicholas Mwai.

In just under 30 years, trade between China and Pacific Island Countries (PICs) has grown from US$153 million in 1992 to US$5.3 billion in 2021. That’s a 3,364% increase, according to official Chinese statistics published in the Fact Sheet on Cooperation Between China and Pacific Island Countries, updated on May 24, 2022.

These figures refer specifically to trade between China and the 10 Pacific countries that maintain diplomatic relations with China, including Vanuatu. Over that time, total trade volume expanded more than thirtyfold, with an average annual growth of 13%.

For Vanuatu and its neighbours, these are not just numbers—they reflect expanding partnerships and new opportunities in areas such as infrastructure, agriculture, education, and climate resilience.

China first established diplomatic relations with Pacific countries in the 1970s, including with Vanuatu in 1982. Early ties were rooted in political solidarity and post-colonial cooperation. Since then, China has become a key economic partner, particularly through its Belt and Road Initiative (BRI).

Both Vanuatu and Papua New Guinea (PNG) have signed BRI cooperation plans, aligning development goals with Chinese-supported projects. China’s involvement has remained steady over the years, while Western engagement in the region has often fluctuated.

The surge in trade is being driven by several factors: increased Chinese demand for Pacific resources like timber, seafood, and minerals; greater Chinese investment in infrastructure across the region; rising exports of Chinese machinery, building materials, and consumer goods; and growing people-to-people connections through scholarships and exchanges.

This trend shows that China views the Pacific as not just a strategic region but also an economic partner. For Vanuatu, this brings opportunities to broaden its trade relationships and strengthen economic stability.

Chinese cooperation has also introduced practical solutions to everyday challenges. One such example is Juncao technology, which enables mushrooms to be grown using grass instead of wood. This innovation—already used in PNG and Fiji—supports food security, reduces deforestation, and improves rural incomes.

In countries like Vanuatu, where agriculture is both essential and vulnerable to climate change, accessible technologies like Juncao can be transformative.

Vanuatu regularly deals with the impacts of climate change, including sea level rise, stronger cyclones, and coastal erosion.

While Western governments have often made climate pledges that fall short in delivery, China has supported tangible projects—installing solar panels, building climate-resilient infrastructure, and funding green initiatives.

China’s partnerships also extend to health and disaster response—areas that have become more critical in recent years. These efforts contribute to building long-term resilience and supporting local capacity.

One reason Pacific countries are engaging with China is its model of “win-win cooperation,” which respects national sovereignty and avoids political conditions. This differs from some traditional aid partners whose support may come with strings attached.

China has shown greater effort to align its programmes with local development plans. For Vanuatu, this could bring additional support in areas like agricultural modernisation, infrastructure development, and rural services—on terms shaped by local needs.

As Pacific leaders take part in the Third China–PICs Foreign Ministers’ Meeting, discussions likely centred on climate resilience, education, health, and sustainable development. With trade now in the billions, economic ties are deeper than ever.

For Vanuatu, the message is clear: China’s expanding role in the region brings both opportunities and responsibilities.

While keeping relationships open with a range of global partners, the guiding focus must remain on what delivers the most value for Vanuatu’s people.