China showers gifts on tiny, resources-rich island

       "All this assistance from China to Timor Leste is full of sincerity and without any selfishness, unlike what the Western media has speculated."FU YUANCONG CHINA'S AMBASSADOR TO EAST TIMOR.
       The capital Dili's gleaming new Presidential Palace and Foreign Ministry,gifts from China, stand in stark contrast to nearby burnt-out buildings and are symbols of how the energy-hungry superpower is growing closer to tiny,oil-rich East Timor.
       In the 10 years since the independence vote that led to a split from Indonesia,China has spent more than US$53 million in aid to East Timor, also known as Timor Leste.
       While that is just a fraction of the $760 million in Australian government aid, China has raised its profile in dusty Dili in several other ways. It is building big and showing generosity such as its donation of 8,000 tonnes of rice during a recent food crisis. Noticeable projects such as a new Ministry of Defence building, houses for soldiers and schools are under way as are scholarships and training programmes for civil servants.
       In all, China is sending a very public message that it is serious about strengthening bilateral ties with East Timor, which many analysts put down to its desire to diversify strategic energy interests.
       Loro Horta, who is a China expert at Singapore's Nanyang Technological University and is the son of East Timor's President Jose Ramos-Horta, said that the aid is linked to China's desire for energy and infrastructure contracts.
       "The Chinese are desperate for oil,every single drop for them counts and they are definitely looking to Timor as potential to meet that need," he said.
       East Timor is one of Asia's poorest and least developed countries, but it has enormous oil and gas reserves.
       The Bayu Undan gas field is expected to reap $12-15 billion by 2023, according to the country's Natural Resources Minister Alfredo Pires. Bayu Undan is already the subject of a deal between Australia and East Timor but other, untapped reserves still need development partners.
       Another oil field, Kitan, has an estimated 40 million barrels of recoverable light oil, Mr Pires said, and the Greater Sunrise field contains around 300 million barrels of condensate and 9.5 trillion cubic feet of gas, according to the United Nations.
       Lucrative opportunities also exist in the minerals sector, including copper,gold, silver and marble, and for bigticket infrastructure projects as East Timor tries to reverse years of underinvestment.
       Mr Pires said Spain, China and Australia are all keen on a piece of the Timor resources pie, while East Timor expert Damien Kingsbury from Deakin University said the United States and the United Kingdom are also interested.
       China and East Timor's links date back centuries. Hakka Chinese traders sailed there more than 500 years ago looking for sandalwood, rosewood and mahogany. Many stayed on, forming an overseas Chinese community as in many other parts of Asia. Today, Dili's main street is lined with buildings, some of which display Chinese script, families can be seen praying at a Confucian temple in downtown Dili, while Chinese traders run appliance stores on busy streets. Chinese labourers are already at work on one of two heavy oil power plants which are under construction after Dili in 2008 awarded the Chinese Nuclear Industry 22nd Construction Company a $360 million contract to build the power plants and a national power grid. East Timor also paid $28 million for two petroleum vessels from China.
       Mr Loro Horta said China is also angling for big ticket infrastructure contracts such as a pipeline that East Timor wants built from its Greater Sunrise oil field to a proposed processing plant on land.He said Chinese oil giant PetroChina has already done studies and is keen to drill.
       "In 2004, PetroChina did a seismic study and said they didn't find much.But then, two years ago, I heard that they were willing to drill but they want exclusivity rights," he said.
       Yang Donghui, a spokesman for the Chinese ambassador in Dili, said that the first phase of the seismic investigation was completed as an aid project, but that a proposed second phase investigation became the subject of commercial talks between the East Timor government and PetroChina.
       China's ambassador to East Timor Fu Yuancong rejected speculation that China's interest in the fledgling nation is driven by a desire to gain an advantage when East Timor is handing out contracts to develop its billion-dollar oil and gas fields."All this assistance from China to Timor Leste is full of sincerity and without any selfishness, unlike what the Western media has speculated. The Chinese government never bore any political strategy in Timor Leste," he said.
       According to Mr Loro Horta,"The growing Chinese presence is part of their natural expansion into Southeast Asia and I think Timor is not really their priority. But they are definitely keeping an eye on it. The Chinese are very patient and they think very long term."