Contents

Ⅰ　General Report

1　Pacific Islands in China’s Strategy in the 21st Century【Yu Changsen】／001

Abstract: As China is just making its international strategy in the 21st century, the Pacific island countries must be included into considered for the following four main reasons.Firstly, from the geostrategic perspective, those countries are located in the vast central and southwest part of Pacific Ocean, are the only sea route between China and South America, Antarctica and Australia, New Zealand. In the military position, these islands form parts of the second and third islands chain of defense network by the US and its alliance. In order to maximize its interests in the Pacific region, China should build a blue water naval. Secondly, in the economy sphere, since the Pacific island countries belong to developing countries, the economic relations between China and those countries have huge development space. As the natural extension of New Maritime Silk Road in the 21st century, the Pacific island countries can be treated as a model of South-South cooperation. Thirdly, in politics perspective, there are many Pacific island countries have diplomatic relations with Taiwan, thus pose a major challenge to the Chinese sovereignty. China should struggle in making these countries return to the track of One China Policy. Fourthly, in the cultural perspective, the Pacific island countries belong to the multicultural area. China should take advantage of its public diplomacy, play soft power influence. In short, with the increase of overall strength of China in the future, when China plan its long term international strategy, the significance of Pacific islands should not be ignored.

Keywords: Pacific Island Countries; International Strategy; China

Ⅱ　Country Reports

2　The Development of Australian Politics in 2014【Fei Sheng】／015

Abstract: 2014 was a challenging first year in office for the Abbott government, although the political atmosphere was relatively mild in Australia. Abbott struggled to navigate its legislative program through a hostile Senate and successfully repeal the Carbon Tax as his wish. Minister for Immigration Scott Morrison also declared that government “stopped the boats” of the smuggling refugees. However, the budget reform project caused unpleased public opinion and was basically at a standstill. At the state level, three states finished their elections and had seen two changes of government. The Liberal Party had fallen behind Labour Party in the opinion poll. While the liberals won power in Tasmania for the first-time in 16 years but they lost in Victoria. The labours also kept the power in South Australia by a slight victory. More strikingly the premier of New South Wales was resigned because of a bribe scandal. In 2015, the coming challenges to government would mainly be the controversial budget reform and a competitive outline for the next election launched by the Labours.

Keywords: Stop the Boats; Finical Reform; Local Election; Scandal of NSW

3　New Zealand Government’s Policy Direction after 2014 General Election

　　【Wang Tingting】／024

Abstract: In New Zealand general election 2014, National Party won historic third term in Government depending on its good record of economic management.In the third term, Government is committed to develop economy, especially foster export growth; mainly promote diplomatic relations in Asia Pacific; continue to promote work-oriented welfare reform; increase attention and support to the family and children, to provide better public services.And as the newly elected non-permanent member of the UN Security Council, New Zealand actively contribute to United Nations Affairs for improving international status and reputation.In short, National Party's policies continually focus on economic development, meanwhile highlighting “benefiting the people”,“ensuring security”,“pursuing international ideas” etc.

Keywords: New Zealand; National Party; Policy Direction; John Key

4　Review of the Pacific Island Countries Affairs in 2014【Fei Sheng, Huang Guanhua】／043

Abstract: Throughout the year of 2014，Oceania island states enjoyed a gentle and steady development, and it is also a period of time filled with new challenges and chances. That is, this year witnessed the competition between traditional or conservative factors and reformed or changed conditions. In the area of politics democratization achieved a great progress, and as for diplomacy, Chinese President Xi Jinping took a series of visits to island states, which propelled the bilateral relationships. In addition, in the field of economic, a range of new aid donors are operating in the Pacific, including China and India, which complicated the scene for traditional donors. Moreover, island states tried their best to struggle with those traditional powers on climate policy. Though the area faced some power restructuring and differentiation, based on its own characteristics, island states took corresponding measures to cope with the changing international situation, used the measures such as bilateral joint or multilateral cooperation to expand their influence.

Keywords: Oceania Island States; Politics; Diplomacy; Economic; Climate

5　New Zealand Universal Superannuation System and Private Retirement Saving

　　【Li Qingxia, Zhang Qingcai】／053

Abstract: New Zealand superannuation system of universal state pension and private retirement saving which tax policy transformed from tax-neutral（1987-2007）to tax-incentive is unique among developed countries. New Zealand provides adequate and largely satisfactory basic incomes protection for all older people, abating inequality with high degree of simplicity and lowest fiscal costs. This paper examines how New Zealand was able to achieve this system and sustain it, asking why New Zealand still wholly adheres to its traditional two pillars and does not converge to the mainstream of three pillars. The welfare philosophies and the initial organizational set-up have affected the cognitive views of later policymakers. Anglo-American welfare philosophies, persistent generosity of basic pension scheme and booming private retirement saving all together decide the“two legs”way of New Zealand pension. The advantages and practical experience of New Zealand pension system provides an alternative model to the new type rural social pension scheme in China.

Keywords: Superannuation; Private Retirement Saving; New Zealand

Ⅲ　Regional Relationship Reports

6　Marine Economy Cooperation and Sustainable Development of the Pacific Island States

　　【Yu Changsen, Cai Yifeng】／066

Abstract: The abundant marine resources, has become the common topic that the Pacific Island States share, and also has become the representative of the humanistic characteristics of the South Pacific Island States. Although ocean has played the very important role in economy and society of the Pacific Island States,the lack of integrated planning and enforced constraints become the potential threat of sustainable development. All in all, what has to take into consideration is how to establish marine ecological concept, marine cooperation mechanism as well as the restriction of law framework.

Keyword: Pacific Island States; Marine Economy Cooperate; Sustainable Development

7　Relations among U.S., Japan and Australia in the Transformation of the Asia-Pacific Regional

　　Order【Jiang Yun】／083

Abstract: The history of relations among U.S., Japan and Australia has changed much since the transformation of the Asia-Pacific regional order. There are three linking nodes in the transformation of the Asia-Pacific regional order. One is that Japan rose and challenged the Asia-Pacific regional order in the first half of the twentieth century. Another is the Cold War in the second half of the twentieth century and the third is the rising of China at the beginning of the 21st century. During these periods, U.S.-Japan relations changed from friendship to hostility and then to the building of the alliance. U.S.-Australia relations transformed from friendship to the building of the alliance. Japan-Australia relations changed from hostility to friendship. Now, the further strengthening of U.S.-Japan-Australia relations aims to jointly respond to the rise of China. For China, the United States is the core of the relationship among the three countries. To this end, China should not only guard against Japan, be wary of Australia, but also be careful to handle its relationship with the United States.

Keywords: Asia-Pacific Regional Order; U.S.-Japan-Australia Relations; Sino-U.S.Relations

8　Australia-US Alliance under the Abbott Government【Yuan Jindong】／104

Abstract: Since the Abbott government came into power, US-Australia alliance has undergone new developments. The alliance’s history aside, China’s rise, growing territorial disputes in the Asia-Pacific region, and traditional and non-traditional security challenges Australia faces at a time of budgetary constraint, have led Canberra to place greater emphasis on US-Australia security cooperation. It seeks to strengthen the alliance mechanisms in multiple ways to ensure that Australia can maximize its security and economic interests without undermining its economic relationship with China.

Keywords: US-Australia Alliance; Asia-Pacific Security; China’s Rise; Abbott Government

9 　US-Australian Relations in the New Trends: Respond to the Rise of China

　　【Zhang Yuquan, Liu Yang】／118

Abstract: In recent years, the Obama administration actively implement the Asia-Pacific“rebalancing”strategy, and further strengthen its“strategic South Anchorage”of the Asia-Pacific defense system. In this context, the author believes that Australia and the United States continuously strengthen their political exchanges and interaction, military security cooperation has been a breakthrough, economic and trade exchanges between China and the US hedge bets, and humanitarian assistance and foreign aid keeping up with United States pace. It can be said that the US-Australia alliance has been consolidating and improving in 2014.

Keywords: US-Australia Alliance; Rebalancing Strategy; the Asia-Pacific Region; China

10　Australia’s Aid to Indonesia in the 21st Century【Fan Ruolan, Pan Yue】／127

Abstract: In Southeast Pacific, Australia and Indonesia are two of the most important countries. The relationship between the two countries have great influence on the security and stability of the Asia-Pacific area. The prosperity and stability of Indonesia is of great importance to Australia. Thus, Australia’s aid to Indonesia serves the interests of Australia, and meets the demands of a developing Indonesia. In the 21st century, Australia constantly expands the aid to Indonesia, the amount of which exceeded that of Japan in 2011, making Australia Indonesia’s largest donor. Under the new circumstances, there are several new features of Australia’s aid to Indonesia. Priority has been given to social infrastructure and public service, especially education, establishing the three-level evaluation system. However, considering problems such as cultural difference, inexperience, mistakes in planning, there is a lot left to accomplish. For example, it still stings in Australia’s foreign aid system that the single aiding form, the imbalance between areas in geographical terms and in social or economic term, and lack of evaluation criterion. Nevertheless, Australia have been adjusting its foreign aid policy, and most of the aiding resources has been used in the Indo-Pacific. So, despite all above, there are much brighter prospects for Australia’s aid to Indonesia.

Keywords: Australia; Indonesia; Aid

Ⅳ　Analysis of Hot Issues

11　Canberra’s Dilemma over the AIIB Initiative and Australia’s Foreign Policy Choice

　　between China and the United States【Wang Yi, Li Fujian】／146

Abstract: As Canberra finds itself increasingly at pains to strike a balance in its foreign policy vis-a-vis Beijing on the one hand and Washington on the other, a fierce public debate has been raging in Australia over whether the country needs to make a choice between its largest trading partner（China）and its most important strategic partner（the US). Faced with this conundrum, key decision makers and foreign policy practitioners in Canberra, as distinct from the academic community and the mass media, seem to have opted for an operational strategy that can be characterised, for want of a better term, as “muddling through”. In contrast to the classic notion of “muddling through” in the study of decision making in political science, we argue that the policy makers in Canberra have adopted this approach more by design than by default. Our investigation of Australia’s response to China’s initiative to establish the Asian Infrastructure Investment Bank（AIIB）has uncovered evidence of conscious and conscientious “muddling” on the part of the Abbott government in order to get itself “through” an intricate and difficult situation. This approach has allowed Canberra not only to avoid making a painful choice between the two great powers, but also to exercise its own flexibility and influence as a middle power to maximise its national interests in circumstances beyond its control. By sifting through the shifting sands of Australian attitudes and reactions to the AIIB initiative, our article is both a test case and an illustration of Canberra’s strategy of“muddling through”in action.

Keywords: Australia; AIIB; Muddling Through

12　On the Situation of the New Caledonia Independence Movement and Its Influence Prediction

　　【Cao Xiaojing, Li Zhiqiang】／163

Abstract: New Caledonia is a special administrative district of France which is situated in South Pacific Region. The native people there is called the Kanak people which seek independence for a long time. Their claim has gain the support from other Melanesia brother countries nearby. In 1998, French government together with the two sides of New Caledonia finalized a political accord on the future status of New Caledonia, in Which it is prescribed that a referendum will be held in 15-20 years, and if 3/5 people choose to be independent, the New Caledonia will gain total independence. Now the referendum will be held in 2018. The pro-independence and anti-independence campaign has continuous arguments on the qualification of citizenship who can vote in the independence referendum. Although the decision of Supreme Court of France supports the pro-independence campaign, the possibility to be independent in 2018 is still comparatively limited. We need to do a basic assessment on the future of it, and make a preparative plan to develop the bilateral relationship between China and New Caledonia accordingly.

Keywords: New Caledonia; Nouméa Accord; Kanak; Melanesia

13　An Institutional Research of New Zealand Serious Fraud Office

　　【Yu Zhangbao, Huang Jie】／171

Abstract: In recent years, China and New Zealand have launched a series of pragmatic cooperation in the diplomacy, economy and trade, education and culture and many other areas with the continuous development of China’s opening level, among them, the judicial cooperation is a new content in the bilateral relations. Both sides are actively promoting the signing of an extradition agreement of corruption offences. And China attempts to learn the successful experience of anti-corruption work in New Zealand in order to deal with various kinds of corruption offences better. Consequently, the introduction of New Zealand corruption governance system is becoming increasingly important. In view of this, the paper will focus on New Zealand Serious Fraud Office(SFO), which is the most significant institute in the New Zealand corruption governance system. In more detail, firstly, we will clarify the definition and dangers of corruption. Secondly, we will explicit the background and development of SFO. Thirdly, the constituents, powers and work flows of SFO will be discussed. Finally, a detailed analysis of SFO’s characteristic , the special role of SFO in the New Zealand corruption governance system and it’s reference to China will be given.

Keywords: New Zealand; Serious Fraud Office; Corruption Governance System

Ⅴ　Special Reports

14　New Zealand and the “One Belt One Road” Initiative【Jason Young】／194

Abstract: President Xi Jinping’s invitation for New Zealand to participate in the development of the “21st Century Maritime Silk Road” during his November 2014 state visit presents a new platform for strengthening New Zealand-China relations. As a strong supporter of development projects and regional integration in the Asia Pacific region, particularly in Southeast Asia and the Pacific, New Zealand has signalled its interest in partnering with China and other countries to meet these goals. While it is still too early to tell which projects New Zealand could best contribute to, New Zealand’s history of “firsts” with China and its positive response to the formation of the Asia Infrastructure Investment Bank suggest a proactive role for the New Zealand government, businesses and people. This article outlines the potential value to New Zealand of the “One Belt One Road” initiative and the areas of potential participation that could add real value. It identifies areas of potential cooperation based on analysis of past and current achievements, including an overview of the recent upgrading of relations to a Comprehensive Strategic Partnership. It argues New Zealand could play a key role supporting the development of regional governance, regional integration and in the provision of niche services and goods trade in regional value chains, as well as by supporting the development of safe and secure agricultural practices, trade and governance in the region. The article concludes the “One Belt One Road” initiative will likely be an important platform for further developing New Zealand-China relations in the coming years.

Keywords: China-New Zealand Relations; One Belt One Road; New Zealand; Asian Infrastructure Investment Bank

15　Trends among Chinese Investors in the South Pacific【Graeme Smith】／211

Abstract: This paper will explore emerging trends among three different sets of Chinese investors in the South Pacific: investors in the retail/wholesale, mining and construction sectors. Larger state-owned mining ventures and construction companies have become significant players in the South Pacific over the past decade, while small scale traders, largely from Fujian and Guangdong have come to dominate the retail trade. All three sets of investors face different degrees of pressure from their competitors, the media and different Chinese and local actors. Based on interviews with Chinese investors in the South Pacific and China, this paper will explore the interaction of these three groups of investors with Chinese state and non-state actors, and evaluate how this shapes their efforts at“localization.”The paper will examine how relations with state and non-state actors in PNG are evolving over time, as all three groups find ways to“get things done”in a region where mainland Chinese investors have a relatively short history of engagement.

Keywords: Chinese Business Investors; South Pacific; Trends

16　Chinese Aid in the Pacific: New Data Revealed【Philippa Brant】／227

Abstract: Although we know its aid program is growing, exactly just how much it gives, where, and in what form, has remained unclear. The Lowy Institute’s Mapping Chinese aid in the Pacific project sought to help rectify this. It is the first time this data has been systemically collected, verified, mapped, and analysed. It is therefore crucial to assess Chinese aid amounts based on executed projects rather than pledges and announcements.

Keywords: Chinese Aid; PICs; Concessional Loan

17　China’s Development Aid to Fiji: Content, Features & Effectiveness【Lyu Guixia】／233

Abstract: China’s development assistance to Fiji began in the 1970s, which is divided into three phases by 1985 and 2006. In the initial phase, China usually presents the interest-free loans and free gifts to Fiji. The sources of funding and forms of assistance was more diverse from 1985, as a result, effectiveness was more prominent. After 2006, China’s aid to Fiji increased dramatically and the fields was more broadly.At the same time, there are some problems inevitably. We should increase aid and toward to the people’s livelihood projects under the principles of equality and mutual benefit and win-win cooperation.

Keywords: China; Fiji; Official Development Assistance

18　China and Natural Resources Development in Oceania【Tarcisius Kabutaulaka】／250

Abstract: The increase of Chinese investments in resource development provide many developing countries, including Pacific Island Countries, with much needed revenue and an alternative to the West. As Pacific Countries interact more with China, one of the biggest challenges is to understand this new power in the region-the dragon in the Ocean-that speaks a language that is largely a foreign and has a unfamiliar bureaucracy. Chinese investment are attractive also because they are often accompanied with aid and access to loans without the stringent preconditions that the governments of Western countries and Western based international financial institutions required. China’s interests in Oceania are punctuated by its high level political engagements with the region’s leaders since 2006. These demonstrate Chin’s willingness to engage with Pacific Island Countries and could be interpreted as illustrating the respect that China, a global power, accord the relative small Pacific Island countries, and the extent that it is willing to go to gain political favor and resource in the region.

Keywords: China; Resource Development; Oceania; Investment

19　Focus on Pan-Peripheral: New Situations of China’s Foreign Aid to the Pacific Island

　　Countries【Yao Shuai】／257

Abstract: Since providing assistance to the Pacific island countries 38 years ago, China has adhered to help those countries to reduce poverty and improve livelihood within the framework of South-South cooperation. In the recent years, with the consistent growth of China’s foreign aid, the assistance to the Pacific island countries witness new situations: 1）top layer design has been strengthened and scale of aid has been expanded; 2）the cooperation platform has been more functional and forms of aid have been more diversified; 3）capacity building has been more effective and localized management has opened a new path. According to the“One Belt and One Road”strategy, with the aims of enhancing economic cooperation between China and Pacific island countries and shaping the international environment to benefit the development of China, China will continue to focus on Pan-Peripheral, expanding the aid scale to this region in order to promote common development when building the“21st Century Maritime Silk Road”.

Keywords: Pacific Island Countries；China’s Foreign Aid

20　An Analysis of Chinese Foreign Aid to the Pacific Islands Countries and Trilateral Aid

　　Cooperation【Zhang Denghua】／269

Abstract: Chinese foreign aid has increased rapidly in recent years and attracted growing attention. Aid to the Pacific Islands countries forms an important part of Chinese foreign aid and has its distinctive features. Compared with Asia, Africa and Latin America, research on Chinese aid to the Pacific Islands Countries, however, is rather limited. Starting with a general picture of Chinese foreign aid, this article provides an in-depth analysis of the features and significance of Chinese aid to the Pacific Islands Countries. Building on the author’s recent fieldwork in the Pacific region, the article also discusses the perceptions of Chinese foreign aid held by the Pacific islands countries and opportunities as well as challenges faced by Chinese aid. In addition, this article explores trilateral aid cooperation as a new phenomenon in Chinese foreign aid and provides advice for policy making.

Keywords: Chinese Foreign Aid; Aid to the Pacific Islands Countries; The Maritime Silk Road; Trilateral Aid Cooperation

21　Trade Imbalance between China and South Pacific Island Countries in the 21st Century

　　【Pang Qin, Ye Jing】／286

Abstract: with the rising demand for resource and energy, China has strengthened its trade with South Pacific island countries since the beginning of the 21st century. An important feature for the trade is that the total trade volume between China and South Pacific countries having no diplomatic relations with China is even higher than those with diplomatic relations. By analyzing customs data in the past decade, this paper finds out that the main cause for this phenomenon is that the Marshall Islands and the Solomon Islands, the two countries having no diplomatic ties with China, have a large trade volume with China. The Marshall Islands mainly conducts entrepot trade with China by establishing offshore company registration system with favorable policies and this entrepot trade can, to some extent, avoid customs tariffs. Thus, it has now become an important way of China’s entrepot export. The Salomon islands mostly make complementary commodity trade with China, with the two sides exchanging what the other side needs. Based on the two cases, this paper further draws the conclusion that China and South Pacific trade has gradually involved from being dominated by “political factors” to “endogenous economic factors”.

Keywords: Countries Without Diplomatic Relations with China; Entrepot Trade; Complementary Trade; China; South Pacific Island Countries

Ⅵ　Appendix

22　The Oceania Events in 2014【Wang Tingting】／301