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

China spent billions on aid to the Pacific over the last decade. Now the U.S. is trying to catch up.

“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.”

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.

“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.

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.

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.

“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.”

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.

“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.”

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