Chinese infrastructure in the Pacific island region built through soft loans appears to have peaked and a “hangover is setting in” as countries have to start repaying debts, a major study has found.

The Lowy Institute has painstakingly gathered figures on all development projects in the neighbourhood from 2011 to 2016 and concluded that while Chinese aid has grabbed attention by focussing on headline-generating projects, Australia remains the most important donor to the region.

An exception is Papua New Guinea, which has signed up to Beijing’s Belt and Road Initiative and would see a steep climb in Chinese infrastructure spending if a proposed $4.7 billion national road project goes ahead.

A JiangSu Provincial Construction Group building site in Port Vila, Vanuatu. Credit:Alex Ellinghausen

But overall, the study underscored that Australia still provided the most substantial aid to the region even as the overall development assistance budget has been cut under the Coalition, said the director of Lowy’s Pacific islands program, Jonathan Pryke.