Managing Taiwan’s Pacific Islands strategy with regional powers

By I-wei Jennifer Chang

Western democracies and Indo-Pacific powers recently have stepped up their diplomatic, economic, and security engagement in Oceania as the region becomes a strategic arena of competition with China. French President Emmanuel Macron visited French Polynesia in July amid growing concerns of Chinese influence and support for independence movements in far-flung French territories in the South Pacific.

Similarly, Australia opened representative offices in the Marshall Islands and French Polynesia in May 2021 and later offered financial support to help Pacific island-nations facing rapidly rising sea levels mitigate the effects of climate change. President Joseph Biden also affirmed US commitments to drastically cut carbon emissions at the Pacific Islands Forum (PIF) leaders meeting held in August, marking the first time a sitting US president has attended this regional forum. This greater Western attention to the Pacific Islands provides an opportunity for Taipei to collaborate with other like-minded partners to counter the growing profile of the People’s Republic of China (PRC) in Oceania, and to safeguard Taipei’s remaining diplomatic alliances in the region.

China’s growing influence and interests in Oceania

In the post-Cold War period, Australia and New Zealand were the primary regional powers actively involved in the central and southern parts of Oceania, known as Melanesia and Polynesia, respectively. The United States was still engaged in the northern part, referred to as Micronesia, with its military base in Guam and its Compact of Free Association (COFA) agreements with the Marshall Islands, Palau, and the Federated States of Micronesia (FSM).

Under the COFA agreements, the United States provides financial assistance to these Freely Associated States (FAS), while retaining rights to establish military bases on these territories and to make national security decisions affecting the United States and FAS. For instance, the Marshall Islands is a major test site for US ballistic missiles and space operations. Japan, which occupied and ruled several Pacific Islands during World War II, is also a major source of development and technical aid to the region.

However, China has increasingly asserted itself as a challenger to the United States and other traditional powers in Oceania and the broader Indo-Pacific region. There are concerns that Beijing’s expansionism in the South China Sea—which includes the construction of airfields and military installations—may extend to the Pacific Islands in an effort to deny US primacy in the Pacific region. After convincing Taiwan’s former diplomatic ally Kiribati to shift diplomatic recognition to the PRC in 2019, China has developed plans to upgrade an old airstrip that had accommodated military aircraft during World War II on Kiribati’s island of Kanton, located a mere 1,860 miles southwest of Hawaii. An increased Chinese presence and military build-up in the Pacific Islands could challenge US military capabilities in Guam along the so-called second island chain.

In light of the China threat, some US lawmakers are calling on the Biden administration to swiftly negotiate and renew the COFA agreements, which are set to expire at the end of 2023 for the FSM and the Marshall Islands, and in 2024 for Palau. However, the COFA talks have stalled over the legacy of US nuclear weapons testing in the Marshall Islands during World War II, with the Biden Administration refusing to bear responsibility for cleaning up the lingering nuclear waste.

Despite US concerns over Chinese military intentions in Oceania, Beijing’s main objectives vis-à-vis the Pacific Islands are more political in nature and related to its ongoing diplomatic competition with Taiwan. In September 2019, China dealt a diplomatic blow to Taiwan after coaxing the Solomon Islands and Kiribati to recognize the PRC and cut diplomatic ties with the Republic of China (ROC). The loss of these two allies whittled Taipei’s diplomatic alliances in Oceania down to four island-nations—Palau, Nauru, Tuvalu, and the Marshall Islands.

Yet Beijing continues to target Taiwan’s remaining Pacific allies, using both promises of financial aid and bans on Chinese tourist groups to pressure these poor and tourism-dependent countries to switch allegiance. Indeed, China has become a major aid donor to the Pacific Islands, though reports suggest that the height of Chinese assistance to the region was in 2018, which was subsequently followed by annual declines in aid.

In addition, China has been utilizing its relations with Pacific Island nations to build its political influence in international arenas. Beijing has placed conditions on its aid packages, coercing recipients in the Pacific to promote Chinese interests in the United Nations (UN), including its bid to prevent Japan from joining the UN Security Council as a permanent member.

From Beijing’s perspective, sending money to small island governments in exchange for more UN votes in favor of Chinese initiatives—as well as votes that could potentially shoot down any anti-China resolution – can be an effective strategy to enhance Chinese influence in international organizations. Thus far, China’s Pacific Island partners have expressed support for President Xi Jinping’s (習近平) Belt and Road Initiative (BRI, formerly known as “One Belt, One Road,” 一帶一路), as well as the newly announced Global Development Initiative (GDI, 全球發展倡議) to enhance exchanges with China on governance issues.

Furthermore, China has a strong interest in securing a steady supply of natural and marine resources from Oceania. The Pacific Island states, notably the Federated States of Micronesia, have some of the world’s largest exclusive economic zones (EEZ), which possess fertile fishing grounds. The Pacific Islands are also poised to be major players in the blue economy, but also face the challenge of managing the maritime activities of larger, more powerful neighbors such as China. Beijing wants access to marine resources, including fish, and its vast fishing fleet has now turned towards fishing in the seas near the Pacific Islands.

However, reports of Chinese vessels engaged in illegal, unreported, and unregulated (IUU) fishing have raised concerns about the negative impact that China’s presence could have on Pacific economies and ecology. For instance, Palauan President Surangel Whipps Jr. has accused China of ignoring his government’s request to rein in illegal fishing by Chinese vessels that have trespassed into Palau’s territorial waters.

Taiwan-China diplomatic competition

Beijing and Taipei have engaged in intense diplomatic competition in Micronesia and Melanesia, which has resulted in the reshuffling of diplomatic alliances on numerous occasions over the past two decades. Some Pacific Island nations have switched recognition between China and Taiwan, only to reverse positions years later, as both sides of the Taiwan Strait have offered financial sweeteners and political support. In one example of constantly shifting positions, Kiribati established relations with the PRC in 1980, later switched diplomatic recognition to Taiwan in 2003, and then restored official ties with China in 2019.

In another example, Nauru cut ties with Taiwan in 2002 after 22 years of diplomatic relations, choosing to recognize China, but later switched its allegiance back to Taipei in 2005. In a short-lived diplomatic switch, Vanuatu Prime Minister Serge Vohor signed a communiqué recognizing Taiwan on November 3, 2004, citing Taiwanese promises of financial assistance. One week later, Vanuatu’s government withdrew the communiqué and maintained official ties with Beijing. Vohor was later deposed in a no-confidence vote in December 2004 for his attempt to establish relations with Taiwan.

For Taipei, elections in Pacific Island nations hold the possibility of changing Taiwan’s position with these island governments, either for better or for worse. With each election, there is concern that the new leader or government that comes into power could favor China over Taiwan. Following the loss of the Solomon Islands and Kiribati in September 2019, Taipei heavily scrutinized the November general election in the Marshall Islands, which included an opposition that supported closer ties with China. However, the Marshall Islands’ freshly elected parliament chose a new president, David Kabua, who has sought to maintain diplomatic ties with Taiwan.

Meanwhile, Taipei’s hopes to regain Kiribati as a diplomatic ally were dashed in the June 2020 presidential election, which resulted in the re-election of incumbent president Taneti Maamau, who had presided over the diplomatic switch in 2019. The political opposition claimed that the Chinese Embassy in Kiribati was heavily involved in swaying voters with material benefits, including donations of toilets, water tanks, and sports equipment.

Tensions between Taiwan and Australia 

The diplomatic battles in the Pacific have frustrated Australia, which has criticized both Beijing and Taipei for interfering in the domestic politics of fragile Pacific Island nations. From Australia’s perspective, China’s and Taiwan’s so-called “checkbook diplomacy” endangered vulnerable island polities and exacerbated violence, political instability, and government corruption. Taiwan and Australia clashed over their respective policies towards Papua New Guinea, the Solomon Islands, and Vanuatu in the late 1990s and early 2000s.

Canberra’s main concern was that Taiwanese financial assistance to these Pacific Island governments was thwarting Australia’s governance agenda in these countries. As the Australian Department of Foreign Affairs and Trade (DFAT) noted, “Australia opposes such chequebook [sic] diplomacy, because […] we have made a very considerable effort to try to address governance issues […] [and we] see chequebook diplomacy as directly undermining the efforts that we have made.” 

Tensions arising from the competition between Australia and Taiwan over their respective roles in the Pacific Islands also resulted in political attacks on Taiwan by Australian politicians, who often used Taipei as a scapegoat for setbacks in Canberra’s own policy. Taiwan was accused by a politician in the Solomon Islands of interfering in the 2006 election by funding various political candidates, an unverified claim that Australian policymakers later used to criticize Taipei’s involvement in the region.

Taiwan’s checkbook diplomacy was particularly prevalent during the presidency of Chen Shui-bian (陳水扁), when the contest for diplomatic recognition was especially heated and led to domestic political scandals that exposed a dark nexus of foreign aid and corruption. Three Taiwanese ministers resigned after it was revealed that Chen’s plan to lure Papua New Guinea with USD $32 million fell through and the money vanished. As a result, Taiwan-Australia relations reached a low point during the Chen Administration. Such tensions began to ease after President Ma Ying-jeou (馬英九) came into office declaring an end to “checkbook diplomacy” and with the beginning of a diplomatic truce across the Taiwan Strait.

Moving forward

In the current period, Taipei needs to carefully manage its Oceania policy with respect to Australia, since tensions previously boiled over during the heyday of Taipei’s checkbook diplomacy. Specifically, it is important for Taipei to recognize that Canberra’s main interests are improving governance and stability in these Pacific countries and protecting its regional influence, rather than assisting Taiwan to secure its diplomatic footing. Therefore, Taipei should work to engage Canberra on a range of governance, economic, and environmental issues currently facing Pacific Island nations, and should be careful not to overstep into what Canberra considers its traditional sphere of influence.

At this critical juncture, Taipei needs the support of Australia and other regional and like-minded democracies in its political and military struggle against China. As Western interest in the Pacific region grows in response to Chinese activities, Taipei could serve as an invaluable player in supporting regional initiatives on Pacific Island issues, leveraging its longstanding presence in Oceania.

The main point: As Western interest grows in Oceania in response to a rising challenge from China, Taiwan should carefully manage its Pacific Islands strategy, particularly with respect to Australia.

This article originally published by Global Taiwan Institute Vol. 6, Issue 22, November 17, 2021, Global Taiwan Brief.