All states in the world have, at some point, been forced to decide whether to recognize the sovereignty of Taiwan or China. Diplomatic relations with one come at the expense of the other. Most have sided with Beijing, including staunch allies that only engage with Taipei informally, such as the United States. A mere 12 continue to maintain formal ties with Taiwan today. The highest concentration of these allies is in the South Pacific, making the often-overlooked corner of the globe one of its strongest and most important diplomatic bastions. However, many island nations have been drawn by the allure of economic development to China’s side in recent years, imperiling Taiwan’s position on the world stage and challenging the United States’s hold on the region.

Beijing has embraced what analysts term “checkbook diplomacy”: trading economic aid for diplomatic favor—in this case, formal recognition. That includes hotels to support burgeoning tourism sectors, infrastructure projects to promote development, and initiatives designed to mitigate the impact of climate change. China’s promises are welcomed with open arms in a perenially isolated region that suffers disproportionately from poverty and climate change. Many of its endeavors fall under its Belt and Road Initiative (BRI), designed to recreate the globetrotting economic hegemony that the dynasties of old wielded with the Silk Road.

Taiwan has struggled to keep pace. With a GDP 20 times smaller than China’s, it can only provide modest aid, such as funding for a piggery project in the Marshall Islands or for vegetable farms in the remote corners of Tuvalu.

Kiribati and the Solomon Islands provide the perfect case studies. I-Kiribati President Taneti Maamau had asked Taiwan for funding to buy commercial airplanes, but Taipei declined. Unsurprisingly, in 2019, Tarawa severed ties and recognized China, citing offers of economic development that far surpassed what its former partner could offer. The Solomon Islands had a strikingly similar experience. That same year, it too sided with China, which quickly earmarked $53 million for a new stadium in Honiara and doubled discretionary funding for MPs’ constituencies. Though domestically marred by concerns over geopolitics and Beijing’s ulterior motives, the tangible impact of these projects on the lives of the I-Kiribati and Solomon Islander peoples cannot be denied.

Meanwhile, Nauru, another former ally of Taiwan, switched sides only two days after the recent election of Lai Ching-te. Due to its dependence on Australia, which has been positioning itself as an alternative to China, for security—Nauru controversially hosts an offshore detention facility for Canberra—it remains to be seen how this will affect the microstate’s diplomatic status quo.

Where the carrot fails, Beijing uses the stick. Palau saw that firsthand when it rebuffed offers to build badly needed hotels in exchange for recognition. China responded in 2017 by placing the country on its travel blacklist, forcing Chinese tourists, travel agencies, and charter flights to turn elsewhere. This was nearly fatal. 54% of all visitors were Chinese, and tourism provided nearly half of Palau’s GDP.

Beijing’s diplomatic maneuvers undermine not only Taipei but Washington as well. Kiribati is the closest South Pacific nation to Hawaii, the United States’s strongest outpost in the region, and controls one of the world’s largest exclusive economic zones. Chinese encroachment there could threaten a state that is already cognizant of its proximity to American geopolitical confrontations with North Korea, and it is indeed already underway—Chinese police have been recently establishing a presence in Kiribati, spooking American officials. As for the Solomon Islands, Beijing and Honiara signed China’s first-ever security agreement in the region in 2022, giving the People’s Liberation Navy (PLN) access to the nation’s ports and inviting Chinese police to train their local counterparts. Granted, Chinese diplomacy has had its flaws—Beijing drew widespread criticism from across the South Pacific for not coordinating the pact with neighboring states—but nevertheless threatens the United States’s monopoly on regional influence.

Taiwan has responded largely by leveraging its democratic principles, such as in Tuvalu. There, in 2019, Chinese companies approached local communities with a $400 million plan to build artificial islands, purportedly to combat the impact of rising sea levels. The prime minister at the time was wary of their true intentions—similar projects have spearheaded Beijing’s expansionism in the South China Sea—and rejected the offer, embracing the “power of grouping together and collaborating” with other Taiwan allies in the region.

However, in recent weeks, analysts have warned that Tuvalu could break with Taipei thanks to pro-Taiwan Prime Minister Kausea Natano’s defeat in the January election. One of Natano’s challengers was his former Minister of Finance, Seve Paeniu, who had campaigned on reviewing Funafuti’s relationship with both Beijing and Taipei. Ultimately, another politician—Feleti Teo—triumphed, and not long after his inauguration, he reaffirmed Tuvalu’s “long-term and lasting special relationship” with Taiwan.

The same applies to Palau, where there is more to the story than aforementioned. President Surangel Whipps Jr. cited “common values [of] freedom, democracy, and rule of law” when asked why his administration had not bowed to Chinese pressure. Further, Palauan culture is noted for its emphasis on fraternity and loyalty, which are readily discernible when most Palauans have personally interacted with Taiwan, whether traveling there for vacations, education, or medical treatment. Such efforts have been funded by Taiwan’s $10 million in annual aid—as of 2018—which, though not even one-fifth of the Chinese funding for Honiara’s new stadium, have nonetheless helped the Palauan people. The hit to the tourism sector was also not as dire as Beijing had hoped. Palauans had actually been hoping for a reprieve for years: in 2015, 169,000 tourists flooded a nation of only 18,000, causing rapid gentrification and runaway environmental degradation. 

As in Palau, gestures of goodwill from Taipei have accompanied its democratic ethos in the Marshall Islands. The nation was quick to reaffirm its friendship with Taiwan after Nauru broke away. The mayors of Kwajalein and the capital Majuro, the country’s two largest municipalities, even bought full-page, pro-Taiwan advertisements in the weekly Marshall Islands Journal. Funding, though certainly not at the scale that China could provide, has played a major role in the government’s enthusiasm. New sports facilities, invitations to Marshallese students to study in Taiwanese universities, and aid to mitigate climate change—$800,000 for a new seawall, 700 boxes of pomelos, and 60 tons of rice—are only a few examples of Taiwan’s efforts to woo the people of the Marshall Islands and of the South Pacific at large.

Taiwan hopes that sincerity and democratic bilateralism can overcome quantity, although exactly how viable that strategy is has been called into question throughout the region. The tussle between it and China for recognition is a zero-sum game. The state of affairs is more complex for their island nation counterparts, however. They can dictate the rival states’ positions on the world stage and reap the benefits of developmental aid, but risk becoming pawns in a geopolitical chess match. The United States must weigh its options carefully as well to preserve its standing in the South Pacific. One fact is certain: what happens here will foreshadow events everywhere else.