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.
A Tongan request for a deferral of repayment was denied by Beijing.
Mr Peters reportedly said that converting loans into grants did not work when committing to debt.
"There are consequences of committing ourselves to debt, and it behooves the government to understand that before walking into a none repayment trap," he said.