China has been steadily working to increase its influence in Palau, using media, economic leverage, and political tactics as part of a broader strategy to expand its global presence.
One key aspect of China’s strategy involves the Overseas Chinese Big Data Group (OCBD), a Chinese company that backed the Palau Media Group, founded by Moses Uludong. The OCBD has ties to China’s military and public security organizations, raising concerns about espionage and Chinese influence in Palau.
Uludong, a prominent figure in Palau and founder of the island’s first newspaper Tia Belau, has long advocated for closer relations with China. This stance contrasts with the Palauan government’s position, as Palau remains a strong ally of the United States and one of only 13 nations globally that recognizes Taiwan. Amid rising tensions between China and the West, Uludong has expressed concerns about the devastation Palau could face if a conflict erupts between the two powers.
In 2018, Uludong launched the Palau Media Group to increase Palau’s visibility in China and create a “hub of information.” However, the initiative was funded by Chinese groups with ties to the police and military, raising red flags over potential espionage and undue influence in Palau’s media landscape.
Although the media initiative failed to gain traction, emails revealed that China had used Uludong’s Tia Belau to publish pro-Chinese content. Uludong denied direct involvement with the Chinese Communist Party (CCP), claiming interactions were with the Zhi Gong Party, which he described as “capitalist.” However, experts view the Zhi Gong Party as a front for the CCP. While the media initiative’s direct impact on editorial content was brief, the involvement of influential Palauans raises concerns about elite capture, especially when foreign powers gain influence over key decision-makers.
Even though China’s media efforts did not achieve significant traction, the country has continued to expand its influence in the Pacific. A recent report by the US think tank ‘Pacific Economics’ warned that China may use transnational criminal organizations to further its political objectives in Palau. These organizations, acting under China’s influence, have been attempting to increase their local presence, secretly funnel funds, and pressure Palauan officials.
The report highlighted investments by the Cambodia-based Prince Group Holdings, led by Chinese businessman NeakOknha Chen Zhi, which has been involved in resort and real estate projects in Palau. The group faces accusations of money laundering, online gambling, and internet fraud. Its investments in Palau are near critical infrastructure such as Koror Port, Palau International Airport, and radar stations, with land leases extending up to 99 years. These developments have raised concerns over Chinese influence on Palau’s strategic assets.
In addition, a recent incident involving two Chinese nationals—Cary Yan and Gina Zhou—has drawn attention to China’s ongoing influence in Palau. The pair, convicted in the US for bribing officials in the Republic of the Marshall Islands, attempted to enter Palau but were denied entry due to their criminal convictions. This incident further underscores the growing tension surrounding Chinese activities in the Pacific.
China’s irritation with Palau also stems from the country’s recognition of Taiwan, a stance Beijing vehemently opposes. The re-election of SurangelWhipps Jr. as president of Palau in November 2024, known for his pro-Western views, further exacerbated tensions. Whipps condemned China’s maritime activities near Palau, accusing Chinese research vessels of trespassing in Palauan waters and disrespecting its sovereignty. He also criticized China’s naming of underwater mountains that Palau claims as its own.
It is important to mention China’s `tourist ban’and how it had adversely affected Palau way back in 2018. A ban on Chinese tourists to the tiny Pacific nation of Palau had left hotels empty, an airline in limbo, and shown the power China has over its vacationing middle class. China had done it as pressure tactic against Palau because of its support for Taiwan. However, China blacklisted Palau as a tourist destination, severely affecting the island nation’s economy. Between 2017 and 2018, Chinese tourism to Palau dropped by 22.7%, significantly impacting the island’s GDP, which heavily relies on tourism.
Despite these challenges, Palau continues to resist China’s attempts to influence its domestic and foreign policies. Its resistance is a crucial stand for other smaller nations in the Pacific and beyond, as it represents a larger struggle against growing Chinese influence in the region. China’s efforts to encircle Palau through media manipulation, economic influence, and political pressure pose significant risks to the island nation’s sovereignty and regional stability. As China continues to expand its footprint in the Pacific, its tactics raise serious concerns about the potential for broader geopolitical shifts that could alter the balance of power in the region. The world must remain vigilant, as the unfolding situation in Palau could serve as a blueprint for China’s future strategies in smaller, vulnerable nations—making it imperative for the international community to monitor these developments closely.