Congress is failing to honor America’s financial commitments to America’s closest allies, turning important friends into castaways.
China has already been trying to win over these countries: Palau, the Federated States of Micronesia and the Marshall Islands.
If Beijing succeeds, China’s military will end up controlling vast swaths of the Pacific Ocean. The three republics include over 1,000 islands and atolls covering a maritime area larger than the continental U.S.
As a result, Chinese forces in new ports and bases will be in a position to block American shipping and aircraft, civilian and military, from crossing that body of water. Moreover, China will obtain facilities putting Hawaii and American territories, such as Guam, within striking distance.
The three countries were once United Nations trust territories that the U.S. administered. Now, they’re sovereign and have Compacts of Free Association with America, making them, from a defense and national security perspective, almost integral parts of the United States. The compacts, among other things, give the U.S. the right to deny other countries access to their territorial waters and airspace.
All three of the compacts were renegotiated last year, resulting in 20-year extensions.
Congress has not funded America’s obligations contained in the renewed compacts, however. Unfortunately, money for the three states, despite strong bipartisan support, was not included in the 2024 National Defense Authorization Act, which passed in December.
Currently, the matter is caught up in the controversy over the national security supplemental funding bill, which cleared the Senate on Feb. 13. The Senate bill includes $95.3 billion for Ukraine, Israel and Taiwan but no monies for the compact states.
America’s financial obligation to the Pacific countries totals $7.1 billion over the next 20 years. At the moment, Congress needs to find only $2.3 billion to complete the funding of the compacts.
Micronesia and the Marshall Islands are currently receiving some funding — at reduced rates — under the last continuing resolution. Palau’s federal funding at the moment has been reduced to minimal amounts.
China has taken advantage of the chaos in Congress, lobbying leaders in the three states to ditch the U.S. Beijing’s not-unreasonable-sounding argument is that a dysfunctional Washington has become an unreliable partner.
Nowhere is the Chinese threat clearer than in the westernmost of the countries. Surangel Whipps, Jr., Palau’s pro-American president, is up for reelection in November and appears to be especially vulnerable to Chinese money coming in to defeat him.
And Beijing has promised a lot of cash to Palau, offering to “fill every hotel room” with Chinese tourists and “more if more are built.” Moreover, the Chinese say they will build a “call center” covering two acres.
Palau, to obtain that cash, has to switch diplomatic recognition from Taipei to Beijing. Micronesia already recognizes the People's Republic as the legitimate government of China. In 2019, Kiribati, close to Hawaii, and the Solomon Islands ditched Taipei. Chinese money was undoubtedly a factor in both cases.
The other factor working in Beijing’s favor is fear. China’s friends make the argument that the islands do not want to become Chinese targets. The intimidation has been effective.
President Whipps asked the U.S. to permanently install a Patriot missile-defense battery to defend America’s over-the-horizon radar in his country, but in late November the Palau Senate passed a resolution rejecting the battery. At the same time, China is offering to build a hotel and casino near the radar installation.
Cleo Paskal of the Foundation for Defense of Democracies told me: “The excruciating funding delay is playing right into the argument that the U.S. is making [Palau] a military target and isn’t helping with our schools or health care.”
Beijing has big ambitions when it comes to Palau, Micronesia and the Marshalls.
“China wants all three compact states to exit the agreements,” Paskal said. “Beijing wants the islands to host Chinese embassies that will essentially function as forward operating bases.”
“On the sea, there would be fleets of dual-use Chinese fishing boats controlling millions of square miles along the sea lines of communication between America and its allies in Asia,” she continued. “A hostile navy will have safe harbors for submarines and surface combatants.”
China’s recent takeover of the Solomon Islands, the site of the epic World War II battle at Guadalcanal, is a warning of what Beijing has in store for the three compact states. With cash payments liberally sprinkled among officials and legislators, China is well along the road of converting the once-thriving democracy in the Solomons into an authoritarian state.
Beijing’s new friend, Prime Minister Manasseh Sogavare, in 2022 managed, in what an opposition leader correctly termed a “power grab,” to get parliament to postpone the next general election.
China is turning the Pacific into its preserve, one casino and island group at a time. And Congress, by not meeting America’s financial obligations, is content to let the Chinese regime turn America’s most loyal allies against America.
Gordon G. Chang is the author of “The Coming Collapse of China” and “China Is Going to War.” Follow him on X, formerly Twitter, @GordonGChang.
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