NADI, Fiji: China announced a wide-ranging package of economic aid to South Pacific island countries yesterday as part of efforts to strengthen relations.

Besides 3 billion yuan (US$375 million) in preferential loans over the next three years, Beijing will grant zero-tariff treatment to goods from the islands, cancel their debt that matured at the end of 2005 and make the seven island states with diplomatic ties approved tourist destinations.

Fijian Prime Minister Laisenia Qarase (R) shakes hands with Chinese Premier Wen Jiabao after a signing ceremony in Nadi, Fiji April 4, 2006 for bilateral agreements between the two countries.[Reuters]

Premier Wen Jiabao made the announcement at the opening of the inaugural China-Pacific Islands economic development forum in Fiji. This is the first visit by a Chinese premier to the South Pacific.

"China is not rich. Still, we are ready to provide assistance without any political strings attached," Wen said in a keynote speech at the forum.

The country will also train 2,000 Pacific government officials and provide free anti-malaria medicines for the next three years.

Fiji is the second leg of Wen's four-nation Asia-Pacific tour, which earlier took him to Australia. He arrived in New Zealand late yesterday and then goes to Cambodia.

"Our economies are complementary," Wen said. "China has funding and expertise. The island countries are rich in natural resources. Herein lies huge potential for bilateral co-operation."

Wen said China's interest in the region was "not diplomatic expediency; rather, it is a strategic decision."

The two-day forum was co-sponsored by China and Fiji.

An economic development and co-operation framework between China and the Pacific Island countries (PIC) was signed yesterday, marking a milestone in China-PIC ties.

The framework highlights a number of key sectors with scope for co-operation, including agriculture and fisheries, tourism and transportation, financial services, engineering and infrastructure.

Papua New Guinea Prime Minister Michael Somare, who is also the chairperson of the forum, said: "The framework will provide an impetus to trade between PIC and China, with an emphasis on stronger export performance from the forum island countries to China."

According to Somare, Chinese investment in the Pacific islands is expected to increase to US$176.3 million by the end of this year, from US$113 million in 2004.

China has a growing business presence in the Pacific. There are more than 3,000 Chinese State-owned and private enterprises, from mining ventures to restaurants.

Other PIC members are Vanuatu, the Federated States of Micronesia, Tonga, the Cook Islands, Niue and Samoa.

Later yesterday, Wen flew to Wellington where New Zealand Prime Minister Helen Clark greeted him at the airport.

(China Daily 04/06/2006 page1)