A dozen island nations are front line for the U.S.-China competition

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Why a dozen small island nations in the Pacific are one more front line for the U.S.-China competition

This week, the White House is hosting a first-of-its-kind summit for Pacific island nations — the Biden administration’s latest bid to boost ties with a region that is getting a rare burst of American attention. In recent months, a series of senior U.S. diplomats have visited the region: Secretary of State Antony Blinken visited Fiji in February, and in July Vice President Kamala Harris gave a virtual speech to the region’s major political convening, the Pacific Island Forum, in which she admitted that the U.S. had neglected the islands.

“We recognize that in recent years, the Pacific islands may not have received the diplomatic attention and support that you deserve,” Harris said. “So today I am here to tell you directly: We are going to change that.”

The Pacific islands comprise 12 small nations — excluding New Zealand — with a total population of only 9.5 million. These latest U.S. overtures are plainly a response to the inroads China has made in the region. Compared with the U.S., China is a relative latecomer to Pacific islands diplomacy, but as China’s foreign policy has grown more assertive, it has steadily raised its profile. President Xi Jinping has visited the region twice, and Chinese foreign ministry officials have frequented these island nations; no sitting U.S. president has visited. In 2019, after talks with Chinese diplomats, the Solomon Islands and Kiribati switched their diplomatic allegiance from Taiwan to China. And in April, China announced that it had signed a secretive security pact with the Solomon Islands, which set off a wave of alarm from the U.S. to Australia.

These tiny nations carry an importance that belies their size. For China, the region matters economically — it has cultivated strong trade ties with many Pacific island countries — and geopolitically, both in terms of its campaign to cut off Taiwan’s global diplomatic ties and its overall military strategy.

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“The reality is that China does not have a real military foothold [in the region], and it wants one,” Brian Harding, senior expert on Southeast Asia at the U.S. Institute of Peace, told Grid.

On the U.S. side, the region matters for several reasons: There are U.S. territories in the Pacific island grouping — American Samoa, the Northern Mariana Islands and Guam — and strong U.S. military ties dating to some of the storied battles of the Pacific campaign during World War II. The U.S. maintains a naval base on Guam and a missile testing range on the Marshall Islands.

Despite that history, the recent U.S. track record suggests that it has indeed shortchanged the region, as Harris acknowledged, at least in comparison to China. Now, the U.S. is racing to “make up for lost time,” as Harding put it — offering a fresh partnership agreement and stronger aid package to the nations at this week’s summit. As the U.S. steps up its game, observers on all sides of the Pacific are watching the island nations closely as a proxy for the broader U.S.-China geopolitical competition.

The U.S.-China aid gap

Prior to the recent spike in U.S. interest in the Pacific islands, Washington had overlooked the region in terms of its aid budget — again, compared with China in particular.

According to the Lowy Institute, between 2008 and 2020, China provided $3.15 billion in aid to the region, compared with $2.3 billion from the U.S. As of 2019, China had committed $8.09 billion in assistance in the coming years — more than three times the U.S. amount. From 2015 to 2019, China outspent the U.S. in each year, sometimes doubling the U.S. figure. Only as the pandemic battered China’s economy did its levels dip.

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Over the past decade, Chinese aid and investments in the region have tended to be more visible than American assistance. While U.S. aid has gone primarily toward humanitarian causes, “China’s aid is more focused on infrastructure projects, and the amount of aid given for a single project is often larger than that of other donors, so [it] often attracts more attention,” Zhou Fangyin, director of the Center for Pacific Island Countries Studies at Guangdong University of Foreign Studies, wrote in 2021. Some of the biggest infusions have included a $123 million loan for a major road repair project in Papua New Guinea — the largest recipient of Chinese aid and a key economic partner in the region.

U.S. aid has been more highly concentrated in countries where it holds close diplomatic ties. The top U.S. recipients were Micronesia, the Marshall Islands and Palau — three countries under “compacts of free association” with the U.S. These are agreements that date to the 1980s, under which the U.S. is responsible for the defense of the countries and has the right to restrict foreign militaries from entering the islands’ territory or establishing bases. Citizens of the three countries receive certain social benefits from the U.S. Outside of these countries, the U.S. has given very little aid to the region.

If its own presence and aid footprint have been light, the U.S. has leaned on allies New Zealand and Australia in its regional diplomacy. Those two countries maintain close relations with the neighboring islands and are the largest donors to the region. But experts cautioned against fully outsourcing its Pacific island diplomacy to its allies — pointing to China’s deal in the Solomon Islands as a reason the U.S. needs to be more involved.

Is China or the U.S. a more attractive partner?

As the U.S. has moved to regain its footing in the region, it is finding successes and challenges both.

At this week’s summit, all the visiting leaders signed a nine-point declaration, outlining closer cooperation with the U.S.; notably, the Solomon Islands signed on after initially indicating it wouldn’t. U.S. officials also committed to $810 million in new aid to the islands, to be doled out over the next decade. Additionally, the U.S. will reopen its Solomon Islands embassy and open two new embassies — in Kiribati and Tonga.

“If it’s a matter of to which power is the Pacific attracted — I think certainly, from a values and cultural standpoint, it would be the United States over China,” said Harding. “But the United States just needs to do the basics.”

China has stumbled occasionally in its efforts to court Pacific Island leaders. In May, Foreign Minister Wang Yi attempted to broker a regionwide deal of China’s own, but failed to pull it off after receiving pushback from some Pacific Island leaders. Samantha Custer, the director of policy analysis for the College of William and Mary’s AidData project, told Grid that countries have reasons to be wary of China. “The thing about Chinese financing is it’s a high-risk, high-reward proposition,” she said. While the U.S., Australia and New Zealand give most of their aid in grants, China does so in the form of loans that can saddle countries with large amounts of debt.

The Chinese presence in the Pacific has also led to a significant influx of Chinese commercial activity, which has been both an economic boon and a cause of resentment. Transform Aqorau, director of the Institute for Ocean Studies in the Solomon Islands, wrote in 2021 that “it is respectfully argued that Solomon Islands should be conscious of the cost of Chinese aid. It will not be free.” He pointed to the case of Papau New Guinea, the largest recipient of Chinese aid, where Chinese companies have extracted natural resources in large volumes, including minerals and natural gas.

In 2021, riots broke out in the Solomon Islands, partly in response to the government’s decision to forge ties with China over Taiwan. Many Chinese businesses in the country’s capital were burned down.

Meanwhile, many of these Pacific nations complain that neither the U.S. nor China is doing enough on what they see as the most region’s critical issue: climate change. For many of the low-lying islands, rising seas will make large swathes of their territory uninhabitable in the coming decades. The U.S. and China are the world’s top emitters of carbon dioxide, and neither country is on track to meet global climate targets. The U.S. also lags far behind on its commitments to fund climate adaptation and mitigation in low-income countries, including the Pacific islands.


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While several Pacific leaders have said they’re tired of their countries being dragged into the arena of U.S.-China great power competition, in some ways they are reaping benefits from the increased interest in the region; for one thing, they now have more leverage to push both countries to meet their demands. The Marshall Islands, one of three countries with a free association agreement with the U.S., announced on the eve of the summit that it would suspend talks on renewing its association until the U.S. did more to address radiation levels that persist from nuclear weapons testing in the country.

“Pacific countries are also interested in hedging,” said Custer. “If you’re a small country, and you feel that you are in the shadow of an Australia or New Zealand, that’s right on your doorstep, you see the option of well, ‘If I cultivate a relationship with China, maybe that strengthens my hand when I’m negotiating with these other powers.’”

What’s clear is that China’s presence in the islands has caused shifts in the global dynamics at play in the region. It’s an example of how U.S. foreign policy is being reworked to compete with China’s increasingly assertive diplomacy around the world.

Custer warned that the U.S. needs to listen to the interests of island nations rather than solely racing to match China’s moves. “For the U.S., I think it needs to be careful about not making its strategy entirely responsive to China.”

Thanks to Lillian Barkley for copy editing this article.

  • Lili Pike
    Lili Pike

    China Reporter

    Lili Pike is a China reporter at Grid focused on climate change, technology and U.S.-China relations.

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