China Promises New Investment in Tonga as Debt Pressures Mount

China has promised new investments in Tonga as the Pacific Island nation grapples with mounting debt repayments, underscoring Beijing’s ongoing bid to expand its influence across the Asia-Pacific.

President Xi Jinping met King Tupou VI of Tonga in Beijing on Tuesday, where he pledged continued support for Tonga’s economic and social development—though he did not specify any new funding amounts.

“Tonga and China are true friends who have stood by each other through good times and bad,” Xi said during their meeting at the Great Hall of the People. He added that regardless of global changes, China would continue to support Tonga in protecting its national independence and sovereignty.

According to state media, Xi said China is ready to align development strategies with Tonga and deepen cooperation in areas including trade, investment, agriculture, fisheries, tourism, and climate resilience.

Tonga, home to around 108,000 people, is one of several small island nations caught in an intensifying contest for influence between China and Western countries due to their strategic locations, UN voting power, and seabed mineral resources.

The country remains heavily indebted to China’s EXIM Bank, still repaying construction loans taken nearly two decades ago. World Bank data shows Tonga owes Beijing about $112 million.

Tonga has sought Australia’s assistance in restructuring this debt, and has also turned to Canberra and Washington for help with climate adaptation and infrastructure funding.

Chinese loan repayments make up 48% of external debt

Budget documents reveal that repayments to the EXIM Bank—amounting to 48% of Tonga’s external debt—have become a central political issue ahead of the 2025 budget. Repayments surged last year, largely tied to loans used to rebuild the central business district after riots in 2006, which now account for two-thirds of the outstanding obligations.

Beijing continues to seek showcase partners for President Xi’s Belt and Road Initiative, a program Tonga joined in 2018. The Chinese readout of the meeting noted that King Tupou thanked China for its support in building Tonga’s infrastructure.

Australia, meanwhile, has provided A$27.1 million this year to support Tonga’s development and bolster its resilience to climate change and rising sea levels. The United States has pledged $4.1 million in 2024.

Tonga’s mounting debt has reinforced Beijing’s interest in further engagement, effectively giving China a stronger diplomatic foothold as the island nation looks for ways to manage its repayment burden.

China’s Ministry of Commerce said Xi and Tupou signed a new “Framework Agreement” on Tuesday aimed at strengthening economic relations. The agreement is designed to allow “flexible and practical consultations” on key issues and boost bilateral trade.