President Xi in Papua New Guinea: Foreign investment helps the island nation's economy

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02:57

One of the benefits for hosting this year's APEC meeting is the amount of foreign investment pouring into Papua New Guinea. Several nations, including China, have invested billions of dollars in a country facing enormous economic challenges. Greg Navarro reports.

The flags lining Port Moresby's newly built Independence Boulevard carry symbols of its benefactor. It leads to a new Parliament building - also built with money from China.

The projects are the result of billions of dollars of welcomed foreign investment from several countries. Money that has poured into the capital city of this year's APEC host nation.

JONATHAN SEETO, SENIOR PARTNER PWC PAPUA NEW GUINEA "We are competing in a global world where foreign direct investment is challenging to get and so when a country like China, a power in the APEC economy reaches out and offers foreign direct investment, I think it is an opportunity that we need to look at."

That investment is evident around the city's port - and has proved critical to Port Moresby's transformation into an APEC host. But the reminders of that money end once you get out of the city and head into the nearby mountains.

"Reporter - who lives in this? Kavia - my parents and two sisters, on the other side it's my kitchen where we used to cook food there."

Here, basic necessities are often hard to come by.

20-year old Kavia Kore lives with 10 members of his extended family in a village dotted with bamboo huts and makeshift shelters. He's well aware of the investment money pouring into the country.

KAVIA KORE "A lot of money, but the government didn't supply any to our area so we are living like this."

The United Nations estimates that nearly 40-percent of Papua New Guinea's people live below the poverty line.

GREG NAVARRO PORT MORESBY "Housing in and around Port Moresby is incredibly expensive and effectively out of reach for a lot of people. A common alternative is settlements like this, which involves a very basic form of shared living, providing them with the basic needs for survival."

Here, basic infrastructure needs are scarce.

JOE KIN "Basic things such as housing problems, unemployment, these are major things inside the settlement. Reporter- healthcare? Joe- healthcare."

Papua New Guinea is coping with a polio outbreak - a disease that now only survives among the world's poorest nations.

JONATHAN SEETO, SENIOR PARTNER PWC PAPUA NEW GUINEA "In terms of development PNG has a long way to go. We have challenges in accessing the right capital to unlock our full potential."

The country also faces the challenge of transforming some of that foreign investment to help meet the basic needs of its people. Greg Navarro, CGTN, Port Moresby.