Tonga was “delighted to join the Belt and Road cooperation,” the Prime Minister Hon. ‘Akilisi Pohiva told President Xi Jinping of China when they met in Port Moresby, Papua New Guinea on November 16, during the 2018 Asia-Pacific Economic Cooperation (APEC) annual meeting, according to the PRC Ministry of Foreign Affairs website.

The statement also said that President Xi told the Prime Minister that China appreciated Tonga’s firm adherence to its one-China policy and he encouraged Tonga to become an active participant in building the Belt and Road Initiative.

During the APEC 2018 Annual Meeting, Tonga signed the Belt and Road Memorandum of Understanding and at the same time it was reported that Tonga’s repayment of its $119 million loan from the Exim Bank of China had been deferred for another five years.

This is the second time that the repayment of the principal only of this loan has been deferred for five years.

The loan was approved by Parliament in 2007. In 2013 the Exim Bank of China deferred Tonga’s repayment of the loan, principal amount only for five years.

It is understood that the duration for the repayment of the loan was for 20 years, so a balance repayment of the loan is due on 2027; five years from now it will be 2023, leaving Tonga only four years to repay the $119m loan, plus interest.

Belt and Road Initiative

The Belt and Road Initiative (BRI) is a US$900 billion investment by China to build railways, ports and other infrastructure development in 70 countries, and it is said to be the biggest foreign investment strategy by any single country in world history.

As far as Tonga is concerned it appeared that the deal was that if Tonga supported China’s BRI, in return China deferred the repayment of the principal only for Tonga's $TOP119m Loan for another five years.

The implications of our signing of the Belt and Road Initiative Memorandum of Understanding, other than the deference of the repayment of our loan for another five years has not been spelled out by the Tonga Government.