for The chronicle of the Pacific power rivalry, David Panuelo’s letter leaked on March 10 is the keeper. Speaking to Congress and the governors of Micronesia, the outgoing president of Micronesia provided fascinating details of how China has bullied and bribed politicians into pro-China lines. Mr Panuelo accused China of waging “political warfare” against his country. To mitigate the damage done by this approach, he suggested that Micronesia shift its diplomatic recognition to Taiwan. He claims to have received $50 million in commitments from Taiwan, plus $15 million in annual payments to plug the fiscal hole that shunning China would create.
China’s brazen tactics in the small Pacific island nations are no secret. However, the level of detail provided by Mr Panuelo is excellent – and certainly deeply embarrassing for China. “We have been bribed to be complicit and to remain silent,” he wrote. He described China’s offer of cash envelopes and private jet travel to curry favor with politicians and executives who “substitute personal interests for national interests”. In another instance, China’s ambassador to Micronesia pushed the covid-19 vaccine to the center of China’s latest global propaganda campaign, so much so that the president had to change his cell phone number.
Warn when gift doesn’t work. Mr Panuelo claimed to have received “direct threats to my personal safety” from Chinese officials. While in Fiji for a Pacific Islands Forum meeting, he said he was followed by two men from the Chinese embassy.
Even from a country of just 113,000 people, China bristled at the apparent slight, calling the letter “slander and accusation”. But it will be hard to dismiss. Mr Panuelo has been warning of the risks of dealing with China. Last May, he published another letter to Pacific island leaders urging them to resist Chinese pressure to join a “common development vision” that would constitute a new geopolitical bloc. They officially rejected it.
Mr. Panuelo’s latest insight is how much China’s political warfare has to do with Taiwan, where the Beijing government has publicly stated its readiness to invade. Micronesia, along with the neighboring Marshall Islands and Palau, is north of the equator and more prone to conflict over Taiwan than the more numerous Pacific nations to the south. It is also close to Guam, a key logistics base for the U.S. Armed Forces in the Western Pacific. In response to a possible war, China wants Micronesia to ally with China against the United States, Mr. Panuelo said.
This would mean a drastic loss of sovereignty. In fact, the fate of small Pacific nations is doomed to lose agency in the face of a great power struggle between the United States (and its friends, such as Australia) and China. However, Mr. Panuelo’s response shows that this is far from inevitable.
His contempt for China and his open consideration of a move to Taiwan suggest that Micronesia has strong leverage on certain issues. After all, China and Taiwan are locked in a bitter rivalry over diplomatic recognition — Honduras switched its allegiance to Taiwan on March 14. As Graeme Smith of the Australian National University in Canberra puts it: “If you’re small enough, Taiwan is still an attractive option. Now it’s really as simple as, ‘Give me this many million dollars and I’ll be your friend.'” ‘”. Micronesia needs good things to develop, especially to help prevent the secession of the restive island nation of Chuuk. Even if Micronesia does not change its position, China may have to shell out more money to get it on its side.
“Geopolitical competition can empower small states,” notes Meg Keane of the Lowy Institute think tank in Sydney. That power is on full display in the Marshall Islands, Micronesia and Palau’s renegotiated “Compact of Free Association” with the United States, which has long provided them with security guarantees and economic assistance. All three countries have received increasingly generous terms from the superpower, reflecting its desire to draw them closer.
Elsewhere, Fiji’s incoming prime minister recently walked away from a controversial agreement requiring Chinese security forces to train the country’s police, preferring to work with the country’s traditional security partner, Australia. Across the Pacific, great power competition means more development and more financial choices; countries can pick and choose between them. Small countries in the Pacific prefer that great power competition not pervade their region. But they’re not just its hapless victims.■
Read more from our Asia columnist Banyan:
Fissures in Singapore’s first family grow sharper (March 9)
New Zealand has the right to atone for its colonial crimes in the Pacific (March 2)
Keeping Up With the Tokugawas (February 23)
Plus: How the Banyan column got its name