Taiwan’s Leader Heads to the South Pacific in a Bid to Fend Off China

By Chris Horton

President Tsai Ing-wen of Taiwan, center, during a visit to a Taiwanese military base in January. At the end of her trip to the South Pacific, Ms. Tsai will make a stop in Hawaii on her way back to Taiwan.

TAIPEI, Taiwan — Taiwan’s president, Tsai Ing-wen, will travel to the South Pacific on Thursday to shore up ties with three island nations that still recognize Taiwan as a country, in an effort to offset China’s expanding influence in the region.
Only 17 countries recognize Taiwan’s government, and among those, Ms. Tsai will be visiting Palau, Nauru and the Marshall Islands.
China has been pouring aid and investment into the Pacific islands, raising the question of whether Beijing could strip Taiwan of more of its few remaining diplomatic allies and shrink the self-ruled island’s international presence.
The Trump administration has sought to push back against China’s reach in the South Pacific and Latin America. 

Australia is also concerned, and last year set aside more money in its budget for Pacific aid.
For the small, developing countries that still recognize Taiwan, the primary reason to consider switching recognition to Beijing from Taipei is the aid and investment that China offers. 

But potential economic benefits may come at a cost, officials and analysts in Taiwan and the United States have warned.
“Growing Chinese economic influence over time may be translated into political and strategic influence,” said Bonnie Glaser, director of the China Power Project at the Center for Strategic and International Studies. 

Commercial investment in a port, for example, could lead to military access, she said. 

“This is especially of concern in Latin America, a region that the U.S. has long considered its backyard.”
United States diplomats have argued to Taiwan’s allies that relying too heavily on China is risky, Ms. Glaser said. 

They have provided data about debt traps China has created elsewhere, she added.
The spokesman for Taiwan’s presidential office, Chang Tun-han, would not confirm if aid or investment packages would be announced during Ms. Tsai’s eight-day trip. 

Ross Feingold, a political analyst in Taipei, Taiwan’s capital, said that with elections coming up in Nauru and the Marshall Islands this year, Ms. Tsai was very likely to pledge assistance of some kind.

Taiwan’s foreign minister, Joseph Wu, says China is using its state-owned construction and engineering companies to approach governments in Latin America about switching recognition to China from Taiwan.

Ms. Tsai will make a stop in Hawaii on her way back next Wednesday — a transit that could annoy Beijing. 

The United States shifted to recognizing China’s Communist government in 1979, but still maintains unofficial relations with Taipei.
China considers Taiwan to be part of its territory and has long sought to reduce the number of countries that recognize it. 

Since Ms. Tsai came to power in 2016, Beijing has poached five of Taiwan’s diplomatic allies. 

China has also stepped up pressure on the island democracy by increasing its military activities near Taiwanese waters and airspace.
For Taiwan’s government, the 17 countries that still officially recognize it are of symbolic importance because they support Taiwan’s claim to statehood. 

The most immediate questions hang over two Pacific island nations that Ms. Tsai will not be visiting — Kiribati and the Solomon Islands.
According to Taiwanese news reports, she had initially planned to visit Kiribati on this trip, but the stop was called off because of what officials said were scheduling conflicts. 

Last May, initial plans for a visit by Ms. Tsai to Burkina Faso were similarly shelved shortly before the country severed ties with Taipei.
Rick Hou, the prime minister of the Solomon Islands, has said he will review the relationship with Taiwan if he is re-elected this year. 

China has become a major export destination for the Solomon Islands in recent years, primarily driven by unsustainable logging of the country’s rain forests.
China is aggressively pumping money into the South Pacific via Xi Jinping’s Belt and Road Initiative, said Karl Eikenberry, director of the U.S.-Asia Security Initiative at the Shorenstein Asia-Pacific Research Center. 

The Chinese initiative is a sweeping plan for infrastructure investment to more closely link China with Asia, Africa and Europe.
“A lot of the money that they’re investing isn’t transparent,” Mr. Eikenberry said at a news conference at Taiwan’s Institute for National Defense and Security Research on Tuesday. 

“It’s corrupting political systems.”
“Do they see strategic utility in having a presence in those Pacific island nations?” he said. 

“The answer is yes.”
Late last month, Secretary of State Mike Pompeo spoke at a gathering of South Pacific nations, including the leaders of the Marshall Islands, Kiribati and Palau, praising the countries for their recognition of Taiwan.

Soldiers hoisting the national flag at Liberty Square in Taipei, Taiwan’s capital. China considers Taiwan to be part of its territory and has long sought to reduce the number of countries that recognize it.

“We respect and support the decision those of you have made to continue to support Taiwan,” Mr. Pompeo said.
Latin America is also a source of worry for Taiwan.
Taiwan’s foreign minister, Joseph Wu, told journalists last week that China is using its large state-owned construction and engineering companies to approach governments of Taipei’s diplomatic allies in Latin America about switching recognition to Beijing.
“All these countries that are not able to finance the projects themselves need to get loans from China — that’s debt-trap diplomacy,” Mr. Wu said.
Mr. Wu cited as examples Panama and El Salvador, which normalized relations with China in June 2017 and August of last year, respectively.
The Trump administration has stepped into the diplomatic tug-of-war. 

In September, the State Department recalled its top diplomats from the two countries, as well as the Dominican Republic, which dropped Taiwan for China last May.
El Salvador’s ties with China have become a question. 

Nayib Bukele, the new president-elect, said after a speech at the Heritage Foundation in Washington this month that he was reviewing his country’s relations with Beijing, suggesting that reverting to recognition of Taiwan was a possibility.
Before Mr. Bukele was elected last month, his predecessor, Salvador Sánchez Cerén, met with Xi Jinping and secured $150 million in aid from China for 13 projects, the details of which were not made public.
Mr. Bukele said Beijing was selling projects to countries that cannot repay the loans that come attached to them. 

“They go in, they do projects that are not feasible, then they leave the countries with huge loans they cannot repay and they use as a kind of leverage.”
John Bolton, President Trump’s national security adviser, met with Mr. Bukele during his visit and said the United States would work with Mr. Bekele to “counter Chinese predatory practices.”

Rogue Nation

Backlash against China jeopardizes its free ride
By BRAHMA CHELLANEY 

On a recent official visit to China, Malaysian Prime Minister Mahathir Mohamad criticized his host country’s use of major infrastructure projects – and difficult-to-repay loans – to assert its influence over smaller countries. 

While Mahathir’s warnings in Beijing against “a new version of colonialism” stood out for their boldness, they reflect a broader pushback against China’s mercantilist trade, investment and lending practices.
Since 2013, under the umbrella of its Belt and Road Initiative, China has been funding and implementing large infrastructure projects in countries around the world, in order to help align their interests with its own, gain a political foothold in strategic locations, and export its industrial surpluses. 

By keeping bidding on BRI projects closed and opaque, China often massively inflates their value, leaving countries struggling to repay their debts.
Once countries become ensnared in China’s debt traps, they can end up being forced into even worse deals to compensate their creditor for lack of repayment. 

Most notably, last December, Sri Lanka was compelled to transfer the Chinese-built strategic port of Hambantota to China on a 99-year, colonial-style lease, because it could longer afford its debt payments.
Sri Lanka’s experience was a wake-up call for other countries with outsize debts to China. 

Fearing that they, too, could lose strategic assets, they are now attempting to scrap, scale back, or renegotiate their deals. 

Mahathir, who previously cleared the way for Chinese investment in Malaysia, ended his trip to Beijing by canceling Chinese projects worth almost US$23 billion.
Countries as diverse as Bangladesh, Hungary and Tanzania have also canceled or scaled back BRI projects. 

Myanmar, hoping to secure needed infrastructure without becoming caught up in a Chinese debt trap, has used the threat of cancellation to negotiate a reduction in the cost of its planned Kyaukpyu port from $7.3 billion to $1.3 billion.
Even China’s closest partners are now wary of the BRI. 

In Pakistan, which has long worked with China to contain India and is the largest recipient of BRI financing, the new military-backed government has sought to review or renegotiate projects in response to a worsening debt crisis. 

In Cambodia, another leading recipient of Chinese loans, fears of in effect becoming a Chinese colony are on the rise.
The backlash against China can be seen elsewhere, too. 

The recent annual Pacific Islands Forum meeting was one of the most contentious in its history. Chinese policies in the region, together with the Chinese delegation leader’s behavior at the event itself, drove the president of Nauru – the world’s smallest republic, with just 11,000 inhabitants – to condemn China’s “arrogant” presence in the South Pacific. 

China cannot, he declared, “dictate things to us.”
When it comes to trade, US President Donald Trump’s escalating trade war with China is grabbing headlines, but President Trump is far from alone in criticizing China. 

With policies ranging from export subsidies and non-tariff barriers to intellectual-property piracy and tilting the domestic market in favor of Chinese companies, China represents, in the words of Harvard University’s Graham Allison, the “most protectionist, mercantilist, and predatory major economy in the world.”
As the largest merchandise exporter in the world, China is many countries’ biggest trading partner. Beijing has leveraged this role by employing trade to punish those that refuse to toe its line, including by imposing import bans on specific products, halting strategic exports (such as rare-earth minerals), cutting off tourism from China, and encouraging domestic consumer boycotts or protests against foreign businesses.
The fact is that China has grown strong and rich by flouting international trade rules. 

But now its chickens are coming home to roost, with a growing number of countries imposing anti-dumping or punitive duties on Chinese goods. 

And as countries worry about China bending them to its will by luring them into debt traps, it is no longer smooth sailing for the BRI.
Beyond Trump’s tariffs, the European Union has filed a complaint with the World Trade Organization about China’s practices of forcing technology transfer as a condition of market access. 

China’s export subsidies and other trade-distorting practices are set to encounter greater international resistance. 

Under WTO rules, countries may impose tariffs on subsidized goods from overseas that harm domestic industries.
Now, Chinese dictator Xi Jinping finds himself not only defending the BRI, his signature foreign-policy initiative, but also confronting domestic criticism, however muted, for flaunting China’s global ambitions and thereby inviting a US-led international backlash. 

Xi has discarded one of former Chinese strongman Deng Xiaoping’s most famous dicta: “Hide your strength, bide your time.” 

Instead, Xi has chosen to pursue an unabashedly aggressive strategy that has many asking whether China is emerging as a new kind of imperialist power.
International trade has afforded China enormous benefits, enabling the country to become the world’s second-largest economy, while lifting hundreds of millions of people out of poverty. 

The country cannot afford to lose those benefits to an international backlash against its unfair trade and investment practices.
China’s reliance on large trade surpluses and foreign-exchange reserves to fund the expansion of its global footprint makes it all the more vulnerable to the current pushback. 

In fact, even if China shifts its strategy and adheres to international rules, its trade surplus and foreign-currency reserves will be affected. 

In short, whichever path it chooses, China’s free ride could be coming to an end.

China must apologise for 'arrogance', Nauru president demands

Tensions rise further at Pacific Islands Forum as leader accuses Beijing of buying their way through the region
By Ben Doherty

Nauru’s president, Baron Waqa, said China needs his country ‘for their own purposes’. 

Nauru's president has demanded China apologise for a senior envoy’s "crazy" behaviour at the Pacific Islands Forum, and lashed out at Beijing's "arrogant" presence in the region.
"They're not our friends. They just need us for their own purposes," President Baron Waqa said. "Sorry, but I have to be strong on this because no one is to come and dictate things to us."
"We're seeing a lot of big countries coming in and sometimes buying their way through the Pacific, some are extremely aggressive, even to the point that they tread all over us," Waqa said. 

"From this forum, all leaders [now] know how arrogant some of these people are."
Waqa said such behaviour merited an apology from Beijing. 

“We won't just seek an apology, we'll even take it up to the UN,” he said. 

“Not only that, I will mention it at the UN and every international meeting.”

Chinese envoy walks out of meeting after row with Nauru president amid bullying claims

This year's annual Pacific summit, which wraps up in Nauru this week, has been one of the most contentious in the event's 49-year history.
The animosity – fuelled by Nauru’s continued recognisance of Taiwan over China – erupted spectacularly on Tuesday when the head of China's delegation Du Qiwen attempted to address a meeting but Waqa refused to let him speak until island leaders had finished. 

Leaked video shows Waqa telling Du: “Show some respect.”
The diplomatic spat pits Nauru – with a population of 11,000 and a landmass of just 21 square kilometres – against an Asian superpower that is the most populous country on Earth, with 1.4 billion citizens.
Nauru has remained close to Taiwan largely through Taipei’s financial largesse, including direct monthly payments to members of parliament (described as “project funding that requires minimal accounting”) and grants and aid funding.
Most of the buildings and infrastructure used to host the Pacific Islands Forum (PIF) were built or upgraded with Taiwanese money.
Tensions between Nauru and China were first exposed before the forum even started, when Nauru immigration officials refused to stamp the diplomatic passports of the Chinese delegation.
Tuesday’s treatment of the Chinese delegate was seen as a deliberate and public humiliation, the source inside the closed-door meeting said, and a reflection of Pacific suspicions about Chinese intent in the region.
Waqa told a media conference late on Wednesday Du was a “nobody” and “crazy”.
"Would he behave like that in front of his own president? I doubt it.
"He disrespected the Pacific, the forum island leaders and other ministers who have come to join us in our territory. Are you kidding? Look at him, he's a nobody.
"He's not even a minister and he's demanding to be recognised and to speak before the prime minister of Tuvalu. Is he crazy?"
Waqa’s exchange with Du highlighted sensitivities over Beijing's rising influence in the Pacific. China is set to overtake Australia as the largest donor to the region, after pledging US$4bn in aid to the region last year.
There are concerns loans from China, if not serviced by small Pacific economies, could be called in by Beijing in debt for equity swaps on disadvantageous terms, giving China increased military access and strategic influence in the region.
China has shown no sign of backing down, with a foreign ministry spokeswoman saying on Wednesday that Nauru violated forum regulations "and staged a bad farce".