China’s diplomacy focuses on poaching Palau, Taiwan’s ally

China is in worst form. Soon after the declaration of president’s elections in Taiwan, it has stepped up efforts to isolate Taiwan.

Irritated by Taiwan’s election which returned the incumbent Democratic Progressive party, a pro-sovereignty administration that Beijing had hoped to see ousted, China stepped up efforts to isolate Taiwan from its allies. It had succeeded in convincing nine of Taiwan’s diplomatic allies to dump Taiwan for China. Nauru was the last country to have switched its loyalty towards China. Prior to that was Honduras which severed ties with Taiwan in April last year, ending 82 years of mutual diplomatic recognition.

China has identified Palau which has close relations with Taiwan. However, it has used tourism as a weapon to pressurise Palau to sever diplomatic ties with Taiwan. The Pacific island nation of Palau which needs US help to deter China’s “unwanted activities” around its coasts, has reiterated its determination to maintain diplomatic ties with Taiwan.

Meanwhile, Taiwan’s Ministry of Foreign Affairs spokesman Jeff Liu said Taiwan empathizes with Palau’s plight of China’s economic coercion, and the island will continue to provide assistance.

Palau’s President SurangelWhipps Jr. made public China’s offer claiming that Washington’s delay in providing economic help to the Pacific island nation Palau has made some local leaders more willing to drop diplomatic ties to Taiwan in exchange for Beijing’s financial assistance.  “The leaders here (some of whom have done ‘business’ with the PRC) who want to accept its seemingly attractive economic offers – at the cost of shifting alliances, beginning with sacrificing Taiwan,” President SurangelWhipps Jnr wrote in a letter dated February 9, reported the SCMP daily. China has offered to “fill every hotel room,” in Palau, “and more if more are built” if the small island nation were to break ties with Taiwan. The letter further claims that China offered 20 million US dollars per year for the creation of a “call centre” in Palau, a nation whose economy relies heavily on tourism.

Palau, an archipelago of more than 500 islands, is one of 11 nations that continue to maintain diplomatic ties with Taiwan. Since 2016, Taiwan has lost around a dozen diplomatic allies.

Palau became upset with US Senate passing a  bipartisan 95 billion US dollars foreign aid package but it failed to include money for the newly negotiated Compact of Free Association (Cofa), a pact that binds the US closely with three Pacific island nations – Marshall Islands, Micronesia and Palau.

According to an editorial in Teipei times, China, tourism is an economic tool for its political gain. Cleo Paskal, a senior fellow at the Foundation for Defense of Democracies, a US think tank, posted Whipps’ letter on social media and said that Beijing’s offer was an attempt to sever Palau’s relationship with the US and Taiwan. The letter ended by calling the legislation “critical for both of our democracies and a free and open Indo-Pacific.”

According to the editorial, following last month’s elections, in which voters granted the Democratic Progressive Party a historic third term, despite China’s interference, Whipps’ letter has shown more evidence of Beijing using Chinese tourists to harm Taiwan’s international alliances.

It was not the first time when Beijing targeted Palau for the job. In July 2023 too, Whipps Jr had said that Palau was under China’s pressure to switch recognition from Taiwan to China. Palau was increasingly becoming dependent on China for tourism and money. The Palauan President was lobbying for direct investment from countries other than China to counter the pressure.

In 2022, Palau had announced its intention to maintain diplomatic relations with Taiwan despite pressure from China. China has been making its presence felt in the region. In 2019 the Solomon Islands and Kiribati opted to cut ties with Taiwan and establish diplomatic relations with China.

In 2017, China had issued warning tp travel agencies stating that that it was illegal to advertise group tours to destinations not on China’s approved list.Palau was one of 20 countries which kept diplomatic ties with Taiwan. A clampdown on Chinese visitors would have hurt the Palau economy but Palau did not switch its allegiance away from Taipei. Palau had established diplomatic ties with Taiwan in 1999.

The editorial stated that Beijing uses dollar diplomacy, and that China has long used its tourists as a weapon to pressure or reward other nations for political purposes, such as in 2017, when Beijing banned Chinese from traveling to Seoul after the US said it would deploy the Terminal High Altitude Area Defense missile defense system in South Korea. Cross-strait tourism especially has been politically manipulated by China and its tourism agencies. China unilaterally cut the numbers of tourists and students traveling to Taiwan when President Tsai Ing-wen took power in 2016, and completely banned Chinese tourists from visiting Taiwan in 2019.