China targets tiny Pacific Islands with close ties to U.S.

FPI / June 28, 2023

The Pacific island nations of Palau, Marshall Islands, and Micronesia, known as the Freely Associated States (FAS), have long granted the United States extensive defense and security access, including the right to base at and deny entry to the FAS by someone else’s military.

Citizens in the three strategically-situated FAS nations can also serve in the U.S. military.

Two of the three, Palau and Marshall Islands, recognize Taiwan's independence and do not have Chinese embassies on their soil. This "gives them another layer of protection from Chinese influence operations, while standing for a free and open Indo-Pacific in one of the most politically courageously ways possible," Cleo Paskal wrote in a June 25 analysis for The Sunday Guardian.

Combined, the FAS nations' maritime exclusive economic zones cover an area of the Pacific comparable in size to the continental United States.

"The relationship with the FAS is what allows the U.S. military largely unimpeded deployment from Hawaii to Guam (and through Guam and the Marianas to treaty ally Japan)," Paskal noted.

All of this combined makes Palau, Marshall Islands, and Micronesia three of the biggest targets of the Chinese Communist Party (CCP) leadership in Beijing.

"China is using a wide range of levers to try to get the two that recognize Taiwan to flip, and to weaken support for the U.S. in all three," Paskal wrote.

Beijing worked to build up Palau’s dependence on Chinese tourism. In 2008, there were 634 Chinese tourists in Palau, less than 1% of all tourists. By 2015, it was more than 91,000, or around 54%.

"Then, in 2017, China pulled the plug, making it clear that, unless Palau switched from Taiwan to China, the tourists wouldn’t come back," Paskal wrote.

The loss of Chinese tourists combined with the Covid pandemic devastated Palau's economy.

But Palau stood firm and did not bow to China's pressure campaign.

"Now, the Chinese are inching back in, perhaps in preparation to gain influence before next year’s elections. Recently, chartered flights from Macau have started up again. And previously empty and decrepit Chinese-leased properties are being fixed up," Paskal wrote.

Combating Chinese influence is one of the biggest challenges Palau faces, said President Surangel Whipps Jr.

"We really need to work with others in the region to encourage investment," Whipps told The Sunday Guardian. "We need partnerships. This year finally for [the] first time Japanese investment in tourism will surpass everyone else — there is a new Japanese hotel being built. We want to see U.S. investment here — a U.S. hotel. We are really trying to bring others here. Japan is slow, Korea is slow, Taiwan is slow — China is saying 'give us more flights.' It’s hard to say we won’t accept them because hotels are empty, boats are empty."

Whipps said he would like to see more Palau natives in the U.S. military choose to retire to the island nation. About five percent of Palau's high school graduates enlist in the U.S. military, he said.

"We want them to retire back in the islands — wouldn’t it be wonderful if they return to Palau and receive full benefits in Palau? Then they can be comfortable while contributing to the economy and security of Palau. It [is] an economically small thing for the US but huge when it comes to improving the lives and security in Palau," Whipps said.

Free Press International
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