Pacific debts

The Samoa Observer reports that Winston Peters made the suggestion during an exclusive interview at the recent Forum Foreign Ministers Meeting in Samoa.

Mr Peters said the level of debts that Pacific Island nations owed to the Chinese government should be addressed at the leadership level.

Last week, Tonga Prime Minister Akilisi Pohiva cautioned Pacific Island nations to "slow down" asking China for loans.

He referred to the experiences of his own country, which owes the Chinese government $US160 million.

'Akilisi Pohiva says Tonga is two years overdue on Chinese loan payments, but will this year pay $US14 million towards its outstanding $US160 million debt.

He told the Samoa Observer that if Pacific Islands don't pay their debts to China's government, it will seize their assets as collateral.

He says the only option for Tonga and other indebted nations is to ask China to forgive the debts.

Mr Pohiva has repeatedly asked China's government to forgive Tonga's debt, which is a substantial portion of the kingdom's GDP, or convert the loans to grants.