Palau's president says China is weaponizing lucrative tourism over his refusal to break Taiwan ties

WELLINGTON, New Zealand -- Beijing weaponized tourism to the Pacific archipelago of Palau over its allegiance to Taiwan and its accusations that China was behind a major cyberattack there, President Surangel Whipps Jr. told The Associated Press.

Palau, along with Tuvalu and the Marshall Islands, is one three Pacific nations to recognize Taiwan as an independent democracy — viewed as a snub by Beijing, which asserts it is part of China. Taipei’s allies in the Pacific have dwindled from six countries in 2019; Nauru abandoned its ties in January.

Whipps told the AP in an interview late Thursday that, in 2020 while he was running for his current post, the Chinese ambassador to a neighboring country pledged to flood his tourism-dependent nation of 20,000 people with a million visitors if he capitulated on the country’s stance.

“That continues to be the overture,” he said by phone Thursday. “They say, why are you torturing yourselves? Just join us and the sky’s the limit.”

Whipps refused. “We don’t need a million tourists,” he added. “It’s not always about how much money we get.”

His stance is vanishingly rare amid Pacific island nations — some struggling to sustain themselves and feeling overlooked by Western powers while their backyards are increasingly the settings for some of the world’s most potent contests for influence. Amid intensifying conflict over ocean territory, resources and political sway, Beijing’s pressure on the three hold-out countries was increasing, analysts said.

“As the number of Taiwan’s diplomatic allies in the Pacific dwindles, the obstacles to China’s regional diplomacy diminish,” said Mihai Sora, Director of the Pacific Islands Program at the Lowy Institute.

China’s penalties for Palau’s intransigence are not new, but they have escalated in the months leading up to November’s election in which Whipps will seek another term as leader, he said. In May, he blamed China for a major cyberattack on Palau in which 20,000 government documents were stolen. The claim was unproven, Whipps said, but no other motive or actor had emerged.

Earlier that month, Palau tourism industry representatives were denied visas to enter Macau for a lucrative international industry conference. Then reports appeared in China’s state media and on an official WeChat channel in June, warning tourists of an increase in safety issues for Chinese visitors to Palau. The remarks, seen by the AP, urged citizens to be cautious when traveling there.

Whipps rejected the reports of security problems but said the claims had stuck — visitor numbers from China halved in 2024, now down to 30% of its tourists. Once, 70% of Palau’s visitors came from China, but the country tried to diversify its market after Beijing unofficially blocked its citizens from visiting in 2017.

“Palau has found itself in a position where it relies on Chinese tourists for income,” Sora said. “This is a tap China can quite easily turn on and off — and it does.”

Support comes from other quarters, however. Unlike most Pacific nations, Palau, a republic that has been independent since 1994, holds close ties to the United States in a free association agreement. Washington provides aid and defense support to Palau and its citizens can live and work in the U.S.

In February — as renewal of the aid for Palau, Marshall Islands and the Federated States of Micronesia stalled in a divided Congress — Whipps warned U.S. lawmakers that Beijing was trying to capitalize on the uncertainty. The funds have since been unlocked, and Whipps on Thursday shrugged off any suggestion of lasting damage, adding that democracy “sometimes takes a little longer than expected.”

But many analysts say Washington was too slow to recognize China’s campaign of influence in the Pacific and took for granted relationships with the leaders of tiny island nations who struggled to address growing economic and climate woes. Meanwhile, Whipps said, Beijing offered incentives and wooed with red carpets and fanfare some leaders who had never met an American president before a Pacific summit at the White House first held in 2022.

Western nations had at times seen Pacific island countries as “dots on a map,” Whipps added. Things were changing, he said — this week, Palau hosted New Zealand’s Deputy Prime Minister Winston Peters, who is also the Foreign Minister, in the highest-profile visit Whipps had received from that country.

“That mutual respect, that caring, it means a lot,” he said, adding that China had elsewhere “done very good at that diplomacy.”

Palau has instead strengthened its ties with Taiwan and Japan, which along with Australia have supplied diversity to a tourism market still rebounding from the coronavirus pandemic. In May, a non-stop airline route opened between Palau and Brisbane.

Whipps also hailed educational opportunities for Palau’s youth in the U.S., Australia and New Zealand. “We want our best and brightest to be educated in schools that share our values,” he said.

He also urged more security for its pristine waters — 80% of which are a marine sanctuary, the largest proportion of any country in the world. Four Chinese vessels have made incursions without permission since he became leader, Whipps said.

Recent elections in the Pacific have proved fertile ground for bolstering ties with China. In the first round of national voting Wednesday in Kiribati — which cut ties with Taiwan in 2019 — the Chinese embassy announced on polling day that Kiribati seafood could now enter China’s market. Ahead of an election in the Solomon Islands in April — which also switched allegiance in 2019, forming a secretive security pact with Beijing — the ruling party warned that cooling relations with China could stifle logging trade with the Solomons, a boon its economy is dependent on.

As November’s Palau election approaches, challenges from long-time pro-Beijing voices in Palau are growing once more, Whipps said. However, he said the campaign would be fought not on foreign influence but on the merits of tax reform, and did not believe a change in leadership would weaken ties to Taiwan.

Politicians in Palau do not run on party platforms. Whipps' main opponent for the presidency was the country’s leader until 2021. Former President Thomas Remengesau Jr. also rebuffed China’s attempts at sway during his time in office.

“We’ve always had the belief that we should be friends to all and enemies to none,” Whipps said. “Our relationship to Taiwan shouldn’t be questioned by anybody.”

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AP video producer Olivia Zhang contributed reporting from Beijing.