Solomon Islands could be the next investment hub with stronger Chinese ties

Source:Global Times Published: 2019/9/19 12:22:28

Ma Xiaoguang, spokesperson of Taiwan Affairs Office of China's State Council

The Solomon Islands' decision to cut diplomatic ties with the island of Taiwan and acknowledge the one-China principle may attract more Chinese mainland investment and help the local economy, experts say.

As an economically underdeveloped country, the Solomon Islands has a lot to offer for Chinese investors, particularly in areas where China has a technological advantage, Zhao Shaofeng, an associate professor from the Pacific Islands Research Center at China's Liaocheng University, told the Global Times.

The Solomon Islands is an agricultural country, with agriculture, forestry and fisheries being its main economic pillars. It mainly exports wood, fish, and products such as cocoa and coconut. Most daily necessities, home appliances, rice, industrial manufactured goods and petroleum are imported, Zhao said. 

Locals largely rely on working in Australia and New Zealand for income, or working in local restaurants and businesses. The average monthly salary on the Solomon Islands is 2,000 to 3,000 yuan ($281 to $422), according to Zhao.

The Solomon Islands' tourism and hospitality industry is a potential economic growth sector that will change significantly as diplomatic relations with the Chinese mainland are established, Zhao said, adding that local wood production and processing, fishery resources and infrastructure construction will have great potential for development as well. 

"The local power supply relies mainly on oil development, and the island country pays great attention to sustainable development. China has mature solar technology, which will have a lot of room for development in the Solomon Islands."

According to Zhao, the Solomon Islands could be a land of opportunity for Chinese investors, as long as investors respect local culture and abide by local laws and regulations. 

The Solomon Islands is a suitable destination for engineering companies in China that are capable of undertaking international construction projects, Zhao said. "They can improve local infrastructure. Of course, some companies that are capable of growing crops (vegetables), fishing and breeding companies and so on can also go to invest there"

Investors from the Chinese mainland will need to take into account the local customs. "Some investors like to buy land in island countries, and it is important to confirm whether or not the land has disputes, such as if it is publically owned land or private land. For large-scale investment, investors must do a good job in preliminary research and investigation. Due to political instability in the Solomon Islands, it is possible the investments may fail," Zhao said.


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