The New Zealand Prime Minister is warning Pacific countries that if they cannot pay their debts to other countries, New Zealand will not be bailing them out.

John Key was responding to questions about the influence of China as an aid donor in the Pacific, and as a provider of low-interest loans.

Speaking from Tonga, he said New Zealand is not concerned about China’s presence, and Pacific countries are free to chose who they receive money from.

But Key warned the region’s small island states that New Zealand would not bail them out if they ran into difficulty with debts.

“As long as you are comfortable with that, as long as your lenders are comfortable, then that’s fine.”

The Tongan prime minister, Lord Tu’ivakano, says Tonga is not going to turn down loans that are much more affordable than those offered by commercial banks.

He has played down New Zealand concerns about the overseas borrowing practices of Pacific Island nations.

He argued that while countries such as China did play a genuine role in the Pacific, regional countries should seek grants rather than rack up foreign debt.

China has been an increasingly active lender and aid provider to the Pacific, funding a range of projects and dwarfing the amounts supplied by more traditional development partners Australia and New Zealand.

However, Tonga’s Prime Minister Lord Tu’ivakano has described China as the “new guy on the block,” saying its involvement is to be welcomed.

“When we look at Small Island Developing States they are friends with everybody and no enemy.

“They like to help in order to develop, so China is able to provide some of this help to assist even when we look at these buildings developed here they have a large amount of money that can assist us,” he said, according to the news website Matangi Tonga Online.

The Tongan prime minister argued China’s low interest loans allowed the country’s development to continue, and were unavailable from other sources.

“If we compare them now to the two commercial banks here, they have a very high interest rate of 10 to 15 per cent,” he said.

“Nobody in Tonga will loan from the bank because there are other costs affecting them.

“And I think if China can provide them for us, I wouldn’t say no– I would take it and rebuild.”

Speaking at a joint news conference in Nuku’alofa, New Zealand Prime Minister John Key insisted he was “comfortable” with China’s role in the region, and Pacific nations had “plenty of countries” to choose from as development partners.

During his five-day Pacific tour this week, the New Zealand prime minister announced millions of dollars in extra aid to the three countries on his itinerary.

In Samoa, there was an additional NZ$1 million in aid for the country’s tourism industry, while in Tonga, Key pledged $5 million dollars to help rebuild schools in the Ha’apai islands devastated by Cyclone Ian earlier this year.

“Getting children back into a regular school is vital for their education, safety and emotional well-being.

“Education is one of the priority areas for Tonga under the New Zealand Aid Programme and we are very pleased to be able to respond to the Tongan Government’s request for assistance,” Key said.

New Zealand will also be contributing $2 million dollars to help refurbish Tonga’s main sporting arena in time for the 2019 Pacific Games.

In Niue, the last leg of his Pacific mission, the New Zealand prime minister announced $1 million in support for the country’s tourism industry, and a quarter of a million for its renewable energy sector.

“Part of supporting a viable tourism industry is reliable energy. Niue is committed to increasing the proportion of electricity generation from renewable sources, and New Zealand is very keen to support that ambition,” he said.

Key returned to New Zealand on Thursday.