John Key

Wellington, April 17 NZPA - Prime Minister John Key is continuing to tread carefully over China's relationship with Fiji, saying a collaborative approach to Pacific Island issues will get the best results.

Fiji's self-imposed leader Frank Bainimarama has continued to inflame international opposition by ramping up political reforms over the past two weeks.

China has been financially supportive of Fiji and there have been concerns that continued aid could undermine attempts by Pacific countries to encourage a return to democracy in Fiji.

Prime Minister John Key, who is on an official visit to China, was asked today about China considering loans to Fiji of US$228 ($NZ405) million.

"It's my view if that we could work constructively with China when it comes to aid... then I think we can add value and I think it can deliver better results for everybody," he said.

"In the end though, China is an independent country and it is free to make commercial loans wherever it wants to, we can't stop that, nor would we try to."

He said he had raised the Fiji issue with Chinese leaders to point out that New Zealand and China could work for the betterment of both the Pacific region and each other through collaboration.

"All I can do is repeat the comments that Premier Wen (Jiabao) made yesterday, which was that he has made it clear to the Fijians that to work constructively with New Zealand and other Pacific Forum leaders is in the best interests of getting a successful outcome."

Fiji's Court of Appeal ruled last week that Cdre Bainimarama's military regime was illegal under the country's 1997 constitution.

President Ratu Josefa Iloilo responded by sacking the judges, dissolving the constitution and ruling out any election for five years.

He briefly removed Cdre Bainimarama before re-appointing him as prime minister.

Since then there has been intense government censorship of local media, deportation of international journalists, and a 20 percent devaluation of the Fiji dollar by a new military-appointed Reserve Bank governor.

The 16-nation Pacific Islands Forum has said it will suspend Fiji from the group on May 1 if Cdre Bainimarama hasn't announced an election date.

Since such an announcement has been ruled out and forum chairman, Niue's Premier Toke Talagi, has called for immediate suspension.

New Zealand Foreign Affairs Minister Murray McCully was in Australia today meeting with officials over various issues, including the situation in Fiji.

A spokesman from his office said New Zealand would not individually state whether an immediate suspension from the forum should be fast-tracked.

Such a decision would only be made in conjunction with all the forum's representatives.

Mr Key said this week that New Zealand would back the forum if it moved to suspend Fiji immediately.

NZPA PAR co il dw