Huawei Solomon Islands Tool Battery

The contract between the Solomon Islands and Huawei will be funded by the Export-Import Bank of China, which leads the country's state investments overseas. The bank will loan almost Rmb450mn ($66mn) to the country over a 20-year period at a 1 per cent interest rate to fund the project.

Fergus Hanson, a director at the Australian Strategic Policy Institute think-tank, said that the Huawei agreement was a “slap in the face” for Australia's prime minister Anthony Albanese, who was assured by his Solomon Islands counterpart Manasseh Sogavare last month that Canberra remained the country's top partner.

“This proposal will be a historical financial partnership with the People's Republic of China since the two countries established diplomatic ties in 2019 as the two countries work closely to ensure the successful implementation and operation of the project,” the Solomon Islands government said in a statement.

China signed a security and economic pact in April with the Solomon Islands that ratcheted up geopolitical tensions in the Pacific and triggered a stern reaction from the US and Australia in a bid to counter Beijing's growing influence in the region.