Is Chinese influence in Timor-Leste cause for concern?

National Security College

Pic by Specialist First class Stephan Oleksiak

In order to counter increasing Chinese influence, Australia needs to work at developing a closer relationship with Timor-Leste.

By Andrea Soriano

Over the past months, there’s been increasing concern about China’s influence over Timor-Leste, especially in view to similar events in other Pacific countries.

Australia has grown ever more alarmed by China’s aid program and its aggressive lending to small nations. Unable to service the loans, these countries have rendered China valuable assets such as seaports, which could eventually be used for military purposes.

As one of Australia’s closest neighbours and a possible foothold for Chinese expansion, the prospect of this happening in Timor-Leste is especially concerning for Australia.

China and Timor-Leste’s relationship

China’s political relation with Timor-Leste as a nation dates back to the recognition of the declaration of independence from Portugal on 28 November 1975. After the Indonesian invasion, Beijing was an enthusiastic supporter of the Timorese cause.

Between 1976 and 1978, members of the revolutionary front for an independent East Timor (FRETILIN) traveled to Mainland China attempting to supply the Timorese resistance with military equipment sufficient to arm 8000 men. However, the Indonesian naval blockade (with assistance from the Australian navy) prevented the delivery.

After gaining independence in 2002, China was the first country to establish diplomatic relations with Timor-Leste and has continued to nurture its political relationship with the country’s leaders.

Since Timorese independence, over 2000 Chinese have settled in the country in search of entrepreneurial opportunities. This small population has proven crucial in the economic development of the tiny country, from a number of small businesses such as telecommunications, groceries, restaurants, and motorbike dealers to more substantial investments such as hotels, real-estate, and Dili’s first shopping mall.

According to Dr Ian Storey, Chinese interests in Timor-Leste are threefold: to expand its influence in the Southeast Asian region, to restrict Taiwan’s international space and to gain access to the country’s natural resources.

Although Chinese aid to Timor-Leste is small in comparison to other donors like Australia, Japan, and the European Union, it has nevertheless been very visible. China financed the construction of important buildings such as the Foreign and Defence Ministries, the Defence Force Headquarter, and the Presidential Palace. It also financed the construction of the Timorese embassy in Beijing and one hundred houses for veterans of the War of Independence and the purchase of two Chinese patrol boats in April 2008.

Private Chinese companies have also won contracts to build important infrastructure projects such as hospitals and roads. Probably the most relevant project was the awarded project for the construction of two heavy oil power plants in October 2008. The project was dogged by lack of transparency, economic ineffectiveness and poor environmental awareness, bringing up the case that Timorese leaders were being influenced by China.

For China, close proximity to the Timorese government has brought some gains, such as the rejection of the establishment of a Taiwanese representation office in the country, and support for the Belt and Road initiative. More recently, Chinese presence in Timor-Leste has continued with the acceptance of the Timorese government membership bid to the Asian Infrastructure Investment Bank (AIIB) on 23 March 2017.

The Australian perspective

Historically, Australia has been apprehensive of the possibility of the island of Timor being taken over by an unfriendly nation, given its geographical proximity.

Back in 1974-1975, when FRETILIN pursued Australia’s support for Portuguese Timor’s independence, Australia’s fears against possible communist influence in the party ensured its support for the territory to fall under Jakarta’s ruling.

However, more recently, the adoption of the maritime border agreement between Timor and Australia in March 2018 opened the door to rebuild a once eroded relationship.

Concrete efforts have been seen from Australia to reignite the relationship, such as the official visit to Timor-Leste in July 2018 from then Minister of Foreign Affairs Julie Bishop, a parliamentary visit last November and a promise to further maritime cooperation between the two nations.

The Timorese Government is at odds with parliamentary opposition and President Francisco Guterres about ways to develop the Greater Sunrise gas field.

The Tasi Mane project, where a pipeline and a gas processing plant are to be built through the sea deep towards Timorese territory, as opposed to processing gas in the already built Darwin plant, has been considered risky and commercially unviable for the field’s business partners.

With an operation of such risk and opposition from business investors, the Timor government has come up with the possibility of buying such investors out and have total control of the project. It has been speculated that China could have an interest in this, with a long term vision of having a foothold so close to Australia.

The Timorese government is currently involved in a series of disputes over the way they want to invest their current funds, and it is not clear whether the Sunrise project will be up and running by the time the countries other gas fields run dry. The possibility of a political and economic crisis in Timor is still real. The question is will Australia or China be the critical partner to help Timor prevent or remedy the situation?

For the Timorese government, China is seen as a potential counterbalance to other influences and a good opportunity to receive investment in infrastructure development. At present, Timor-Leste has not taken out huge Chinese loans and is therefore not as vulnerable to Chinese debt as the Pacific nations, but it is important for Australia to assist Timor-Leste development to prevent a possible crisis.

A continuation of closer ties between Australia and Timor-Leste and assistance for the development of alternative sources of income is vital. It is unlikely Chinese interest would ever align with such objective, without sacrificing Timorese autonomy, and Australia’s comfort zone.

This article originally appeared on The Monsoon Project


Is Chinese influence in Timor-Leste cause for concern?

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Updated:  26 February 2024/Responsible Officer:  Head of College, National Security College/Page Contact:  Web administrator