Timor Leste Looks at China for Investments and More…

China, Timor Leste, infrastructure, ASEAN

Zhang Ping (L), special envoy of Chinese President Xi Jinping meets with Timor-Leste President Francisco Guterres Lu-Olo in Dili, Timor-Leste, May 20, 2017. (Xinhua/Zulkarnain)

Over the last decade, China investments in Southeast Asia mostly were directed to Cambodia and Lao PDR. This is now the turn of Timor-Leste. Southeast Asia newest and poorest country is in desperate need to modernise its infrastructure while China is obviously interested with Timor Leste gas and petrol resources…

Timor Leste still remains sidelined by ASEAN, which delays year after year the integration of Southeast Asia’s newest and poorest nation, independent from Indonesia in 2002. ASEAN reluctance to integrate Timor Leste into the regional grouping might be one of the reasons for Timor Leste to look increasingly towards China. The move would also raise speculations among its allies and neighbours over a China stronger presence at the doorsteps of Australia and the Pacific Rim. It would certainly raise concerns in Indonesia, which always sees China involvement in the region as suspicious.

Timor-Leste’s closest regional partners are today Australia and Indonesia. However China is now increasingly showing its presence in the country especially as Chinese firms are involved into major infrastructure projects. This includes highways, electricity supply, a container port at Tibar Bay as well as a new airport. China gave funds to the government to build new offices for ministries. The move is part of a general drive by China to set foot in the Pacific region. The country spent US$1.3 billion on concessionary loans and gifts since 2011 to become the Pacific’s second-largest donor after Australia.

Could Timor Leste become China newest economic conquest in Southeast Asia? ( Photo Reuters/Beawiharta)

China is currently constructing a highway to Southern Timor Leste in Tasi Mane, an important economic area as they are petrol resources. China is also involved with the construction of an airport there. Some US$250 million  have been invested. Some Timorese politicians estimate that infrastructure projects for the country’s modernisation might cost over US$10 billion, a bill that China could definitely finance with loans in return for concessions.

An important role is played by Macau, which used also to be a Portuguese colony and had traditionally strong links with Timor Leste. There is even a small Timorese community living in the former Portuguese territory. Macau companies are already involved with the construction of resorts and hotels in the tax-free region of Oecusse. They are also rumours that the wife of Macau’s casino tycoon Stanley Ho, is interested in investing in Timor-Leste’s tourism sector.

The Macau News Agency reported earlier this year that negotiations are underway to establish an airline connection between Timor-Leste and Guangzhou in southern China. Currently, there are only direct flights to Dili’s airport from Bali, Singapore and Darwin.

As usual, Chinese loans and help is not done on a purely compassionate move. Many experts fear that Timor Leste would then turn totally financially dependent of China and be forced to give concessional rights to the Asian giant. Most experts think that China is indeed looking at concessions in the petrol and gas field. Looking at the rapid growth of Chinese influence in the Pacific, Australia is suddently ready to launch a fund of US$2 billion to assist Pacific nations. Maybe this would also be a wake-up call for ASEAN countries to assert their presence in Timor Leste… Indeed Timor Leste is an integrated part of Southeast Asia…