Empty hotels, idle tour boats: China stings Palau for Taiwan romance

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“The one China principle is the pre-condition and political foundation for China to maintain and develop friendly cooperative relations with all countries around the world,” it said in a statement to Reuters, without specifically addressing the Palau issue.

The “one China” principle is a core government policy that states Taiwan is an inseparable part of China.

Idle Chinese tour buses park in Koror, Palau August 8, 2018. REUTERS/Farah Master
Taiwan’s Ministry of Foreign Affairs says China has lured four countries to switch diplomatic recognition from Taipei to Beijing in the past two years by offering generous aid packages and investment.

“While Taiwan faces serious diplomatic challenges, the government will not bow down to pressure from Beijing,” the ministry said on its website. “Taiwan will work with friendly nations to uphold regional peace and stability and ensure our rightful place in the international community.”

Palau President Tommy Remengesau Jr. said there had been no official communication from Beijing on the tourism restrictions.

“It is not a secret that China would like us and the diplomatic friends of Taiwan to switch to them, but for Palau it is not our choosing to decide the one China policy,” he told Reuters in an interview in Palau’s second biggest city, Meyuns.

Remengesau, whose second and final term as president ends in January 2021, said Palau welcomed investment and tourism from China but the current administration’s principles and democratic ideals aligned more closely with Taiwan.

Palau was adapting to the China pullback by focusing on higher spending visitors rather than mass tourism, which had taken a toll on the environment, said Remengesau, dressed in a lemon colored shirt and white shell necklace.

One of Palau’s key tourist attractions, the saltwater Jellyfish Lake, was shut in 2017 after large numbers of swimmers were blamed for contributing to plummeting jellyfish numbers.

“The reality is that numbers did not mean big revenues for Palau. It actually made us more determined to seek the policy of quality versus quantity,” said Remengesau, who in 2015 declared most of Palau’s territorial waters a marine sanctuary the size of California.

Former Palau government officials say Beijing is trying to cement its influence in the region ahead of the expiry of the Compact Funding agreements between the United States, the Federated States of Micronesia, the Marshall Islands and Palau in 2023 and 2024.

The United States provides around $200 million a year on average to the Compact states and is responsible for the defense of the three countries, which each hold a seat at the United Nations.

Last December, the U.S. belatedly approved $124 million in assistance for Palau through till 2024, but has not announced any plans to extend the Compact agreements.

“The United States and China are not zero-sum competitors,” a U.S. State Department spokesperson told Reuters.

“However, we have concerns about the sustainability of debt loads for countries highly indebted to China, as well as the environmental, social, or labor conditions that often come along with Chinese-financed projects.”


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