China provided more than $60 million three years ago to help pay for the rebuild of the capital, Nuku’alofa, which was destroyed by riots in 2006.
Lawmakers are now trying to trim the budget as Tonga confronts a multi-million dollar deficit while also contemplating how to meet annual repayments of nearly six million dollars from 2013.
The deputy prime minister, Samiu Vaipulu, has told parliament China has offered to make the loan a grant.
Radio New Zealand’s correspondent in Tonga, Mateni Tapueluelu, said many Tongans fear the trade-off will be easier access for Chinese wanting to settle in Tonga.
“That is not a very beautiful option given the fact we have had complaints from local Tongan communities being overcrowded by Chinese competitors, so either way it is not going to be an easy decision for Tonga,” said Tapueluelu.
