As Beijing steps up its global engagement under President Xi Jinping, China is also increasing its involvement in the Pacific Islands region. Beijing’s heightened engagement in the region in recent years is driven by its broader diplomatic and strategic interests, reducing Taiwan’s international space, and gaining access to raw materials and natural resources, according to a recent report from the US-China Economic and Security Review Commission.

Although the Pacific Islands receive less of China’s attention and resources compared to other areas of the world, Beijing includes the region in its key diplomatic and economic development policy—the Belt and Road Initiative (BRI)—which suggests China has geostrategic interests in the region. An April 2018 news report on purported discussions over a potential Chinese military base on Vanuatu, though denied by both countries, raises concerns that a Chinese base could be established in the Pacific Islands. Such a development could pose challenges to US defense interests and those of Australia and New Zealand, key US partners in the region.

Over the last five years, Beijing has significantly bolstered its economic ties with the Pacific Islands. An

examination of trade, investment, development assistance, and tourism data shows China has become one of the major players in the region, well ahead of the United States in most areas. Beijing concentrates much of its economic engagement, especially aid and tourism, among its eight diplomatic partners in the region, but recently it has also made inroads with other Pacific Island countries, including Taiwan’s diplomatic partners.

In terms of diplomatic and security engagement, China has increased its footprint through participation in regional organizations, high-level visits, and public diplomacy efforts. At the multilateral level, China is deeply involved in Pacific Island regional organizations and often provides funding and other support, even if it is not a member or observer. China’s public diplomacy efforts in the region are designed to expand its soft power, including cultural, educational, and humanitarian assistance and disaster relief activities. While China’s security involvement in the region is limited compared to its diplomatic and economic engagement efforts—only three Pacific Island countries possess militaries—it is also on the rise.

Beijing’s growing engagement in the Pacific Islands pose a number of implications for US interests in the region. China’s inroads in Micronesia, where most of the United States’ engagement in the Pacific Islands is concentrated, could threaten US Compact of Free Association agreements with Palau, the Marshall Islands, and the Federated States of Micronesia over the long term.

Some analysts are concerned China is trying to erode US influence in the region to weaken the US military presence and create an opening for Chinese military access. In the Commonwealth of the Northern Mariana Islands (CNMI), a US territory near Guam in Micronesia, Chinese investors’ casino resort developments could complicate US Department of Defense plans in CNMI for extensive

training and exercises resulting from the recent relocation of Marines from Okinawa, Japan. In addition, as China increases its economic engagement, Pacific Island countries may feel more beholden to Beijing and side with it at international forums. Finally, Beijing’s efforts to weaken Taiwan’s international space in the Pacific Islands—a region that is home to six of Taiwan’s 18 diplomatic partners—negatively impacts a key US partner in the Indo-Pacific.