Taipei: Taiwan's government has issued a strong condemnation against China's alleged attempts to undermine its diplomatic relationship with Palau through illicit activities conducted by criminal organizations. This denunciation follows a report by a think tank revealing China's efforts to destabilize this relationship.
According to Focus Taiwan, Taiwan's Ministry of Foreign Affairs (MOFA) released a statement on Sunday highlighting that the People's Republic of China (PRC) has been using Chinese businesspersons and/or criminal organizations with Chinese backgrounds to infiltrate Palau. These groups reportedly operate under the pretense of land development and investments, engaging in activities such as money laundering, gambling, and fraud to economically coerce Palau. MOFA has issued a "stern condemnation" of these practices.
MOFA's statement came in response to a CNA request for comment regarding an American think tank's warning about China's use of transnational criminal organizations to further its political agenda in Palau. The report suggests that these activities could potentially harm Taiwan's diplomatic ties with Palau.
The recent report by Pacific Economics highlights that transnational criminal organizations have been making strategic investments in Palau, which is one of several tactics employed by China to influence the island nation. The Island Times, a Palauan media outlet, warned that the infiltration of such criminal enterprises could deter legitimate investors, thus damaging Palau's investment reputation and tourism industry.
The think tank further noted that PRC-affiliated projects aiming to secure land and infrastructure could compromise Palau's sovereignty and disrupt its strategic role in the Pacific. Jarod Baker, co-founder of Pacific Economics, emphasized that while Palau formally recognizes Taiwan and does not adhere to the "one China" policy, these criminal organizations are used by Beijing to fill gaps where China's foreign ministry might fall short.
Pacific Economics cited the Prince Group, a Chinese-Cambodian conglomerate founded by Chinese businessman Chen Zhi, as an example of such activities. The group has faced allegations related to money laundering, online scams, and human trafficking, drawing attention from both the Chinese government and Radio Free Asia. The report indicated that the Prince Group has proposed resort investments in Palau exceeding US$1 billion.
MOFA's statement contrasted Taiwan's engagement with Palau, noting that Taiwan has fostered close relations by encouraging Taiwanese businesses to invest in the Pacific ally, promoting "more prosperous development of Palauan businesses." Palau remains one of the 12 nations that maintain diplomatic relations with Taipei rather than Beijing.
Palau's President Surangel Whipps, Jr., in office since 2021 and beginning his second term in January, has been a staunch supporter of Taiwan. He has repeatedly accused China of exerting pressure on Palau to sever ties with Taiwan by leveraging tourism as a political tool.