New Zealand's Foreign Minister Murray McCully says there is diminishing scope for China's soft loans to the region.
He says as a consequence China is keen to co-operate more with New Zealand.
Sally Round reports.
"Mr McCully says China wants to learn from New Zealand and have formal talks on development programmes. He's been critical of China's aid strategy in the region, which has centred on generous loans with interest-free periods to countries like Tonga. The International Monetary Fund has noted two loans from China to rebuild Nuku'alofa amount to 41 percent of the country's Gross Domestic Product. Mr McCully says the soft-loan issue is now self-correcting as agencies like the IMF take a firm stand on such indebtedness. The Minister was speaking to scholars, diplomats and students of Pacific geopolitics at Otago University's Foreign Policy School, which this year focuses on the US and China's increasing interest in the region. Mr McCully says the attention is good news for the Pacific and New Zealand can play a role by furthering understanding between the two countries."