Taiwan-Solomon Islands Relations and China’s Growing Inroads into the Pacific Islands

This article was originally published by Global Taiwan Institute in its weekly newsletter, The Global Taiwan Brief, Vol. 4, Issue 13. Used with permission. To get the Global Taiwan Brief in your inbox every week, subscribe at globaltaiwan.org/subscribe. 

***

Dr. Timothy Rich is an associate professor of political science at Western Kentucky University and a GTI Scholarship recipient for 2019-2020.

On June 3, in meetings with his Australian counterpart, the Solomon Islands’ foreign minister Jeremiah Manele stated that his country would make a decision on the continued diplomatic recognition of Taiwan within the next hundred days. This follows elections in April in which then Prime Minister Rick Hou stated that if re-elected, his country would reevaluate relations with Taiwan. Hou lost, but the election of Manasseh Sogavare, who in a previous stint as prime minister faced corruption claims connected with donations made by the Chinese telecommunications company Huawei to his party, has differed little in his rhetoric about relations with Taiwan. Sogavare announced in late June a task force to not only visit Beijing and Taipei, but also other countries in the region that recognize China.

Why does it matter that the Solomon Islands, a poor country with limited political influence, may break off relations with Taiwan? The Solomon Islands have maintained relations with Taiwan since 1983 and have often spoken in support of Taiwan’s role and participation in international organizations that Taiwan cannot join, notably the United Nations. However, the country has no means to do much else to aid Taiwan. Nor have their relations lacked controversy. For example, in 2000, Deputy Prime Minister Allan Kemakeza was dismissed after embezzling some of the USD $14 million that Taiwan provided for civil war victim compensation. The same year, the Solomon Islands reportedly requested USD $150 million to maintain relations—which Taiwan declined—and explored switching recognition to the People’s Republic of China (PRC). One year later, criminal gangs, aware of Taiwanese aid to the government, targeted government officials and demanded millions of dollars in civil war compensation. Opposition parties in 2006 claimed that Taiwanese money in part fueled the election victory of Prime Minister Snyder Rini, resulting in riots in the capital, Honiara.

Taiwan’s Ministry of Foreign Affairs (MOFA) denies engaging in “dollar diplomacy,” yet increasing assistance to the Solomon Islands now may be viewed as a cost-effective means to avoid further diplomatic isolation. Taiwan has provided considerable aid to the country already, including USD $29.3 million to the country’s Rural Constituency Development Fund in 2017, but such efforts have not prevented the country from enhancing economic ties with China. Whereas China is not a major economic partner to Taiwan’s other Pacific diplomatic partners, the Solomon Islands’ economic ties with China are robust, constituting 64.5 percent of its exports, and 21.9 percent of its imports.

Despite these challenges, and with only seventeen countries maintaining formal relations with Taiwan, of which six of them are in the Pacific, concerns arise in Taipei that if the Solomon Islands break relations with Taiwan, that this will create a domino effect with other Pacific allies that still recognize Taiwan over China. To add to this climate of uncertainty, four other Pacific countries that recognize Taiwan over China are scheduled to hold elections this year (Kiribati, Marshall Islands, Nauru, and Tuvalu), with Palaufollowing in 2020. All of these countries will likely see the role of Chinese aid and investment generate similar debates on whether to continue relations with Taipei, as it is going on in the Solomon Islands. But how realistic is it that the change in recognition from Taipei to Beijing of the Solomon Islands will lead others to turn to China as well?

Concerns of a domino effect are not new: often when a country drops recognition of Taiwan, this stokes fears of others following. For example, Taiwanese officials worried about a loss of Caribbean partners en masse when Dominica switched recognition to China in 2004, but St. Lucia’s switch in 2007 to recognize Taiwan calmed such fears. Similarly, when Costa Rica broke relations in 2007, Taiwanese officials feared a domino effect in Central America that ultimately did not materialize. From 2008-2015 under the so-called diplomatic truce between Taiwan and China, neither country tried to entice countries to break relations. When China ended the truce following Tsai’s election in 2016, China’s efforts towards Taiwan’s Central American partners resumed, resulting in El Salvador and Panama breaking relations with Taiwan. Nor does it seem that China would want all of Taiwan’s diplomatic partners to break off relations in quick succession out of fears that this would encourage Taiwanese officials to engage in more provocative actions including a formal declaration of independence. Rather, China’s strategy appears both to entice nearly all of Taiwan’s partners to frustrate Taiwanese efforts to stave off losses, while maximizing international attention, and perhaps domestic attention in Taiwan, by spacing out such diplomatic victories over time.

As some countries have broken relations only to return to Taiwan, including Nauru and Kiribati, this suggests that El Salvador could do so as well, following its switch to China in 2018 and elections this year. Some suggest avenues in which Taiwan could regain diplomatic partners, especially among Pacific island countries as China’s One Belt, One Road (OBOR, or Belt and Road Initiative, BRI) initiative left many deeply in debt. Yet, the economic and political costs of breaking from a rising power may prove daunting. Furthermore, my own work suggests that as a country’s debt increases as a share of GDP, a country is more likely to recognize China over Taiwan. However, the Solomon Islands’ debt as a percentage of GDP has declined significantly in recent years. Looking at the Solomon Islands, debt as a share of GDP has decreased every year since 2003. Within this broader context, if the Solomon Islands decide within the next hundred days to break relations, one should not expect a change of heart unless China simply reneges on aid commitments.

China’s efforts to woo the Solomon Islands should not be viewed purely as an attempt to further Taiwan’s diplomatic isolation. Rather, China’s interests in the Solomon Islands are consistent with a broader effort to expand Chinese influence in the Pacific, efforts that should be of strategic concern for the US and its allies in the region. The US ambassador to Australia referred to China’s efforts in the Pacific as a “pay-day loan diplomacy,” consistent with claims elsewhere that the conditions of Chinese loans often lead to countries granting greater concessions to China when they cannot repay. Australia remains concerned about Chinese telecommunications projects in the Pacific, not only because of their lack of transparency, but also the implications in terms of the security of Australia’s own telecommunications infrastructure. Due to this and broader security concerns, Australia has spent additional aid in the Pacific in part to combat Chinese influence.

The potential for China to use expanded relations in the Pacific to host naval bases or conduct naval drills should also be of concern for the United States. Vanuatu, which recognizes China, has denied reports of negotiations for a permanent Chinese military base in the country. Australian officials have consistently voiced concerns about how Chinese bases in the region would negatively affect Australian interests in the region as well. However, it is conceivable that China would offer aid packages to one of Taiwan’s diplomatic partners far above past offerings if it allowed China to extend its naval reach, a crucial element necessary to deter the United States and others from assisting Taiwan in a future crisis. Assuming initial Chinese interest in a base in Vanuatu, an offer to the nearby Solomon Islands after a diplomatic switch seems plausible.

Such concerns over Chinese militarization in the region and its implications for US strategic interests—including the security of Taiwan—likely played a crucial factor in why then Acting Assistant Secretary for Southeast Asia W. Patrick Murphy stressed the importance of Taiwan’s six Pacific diplomatic partners remaining with Taiwan. While many US officials expressed concerns about growing Chinese influence in Central America and the Caribbean as Taiwan lost additional diplomatic partners there, the loss of Pacific partners presents a less appreciated but also strategic challenge both to American security interests in general and certainly to Taiwan’s security, in particular if China can deny or delay an American response to a cross-Strait conflict.

If the Solomon Islands break relations, Taiwan can reallocate resources budgeted towards other diplomatic partners as it has in the past. It can also alter its rhetoric about recognition and its insistence on calling partners “allies” when other countries rarely use the term so broadly. The current rhetorical ploy only reinforces a victim narrative when countries break relations by treating each as a devastating blow to Taiwan’s sovereignty without properly weighing the depth of substantive relations. However, Taiwan’s long-term interests require actions beyond bilateral aid allocations and rhetoric, especially as China can always offer larger aid packages. The severing of relations would also signal a declining influence of Australia and the United States in the Pacific, which may embolden Chinese efforts beyond isolating Taiwan.

With shared concerns in the Pacific, now more than ever it would behoove Taiwan to find means to explain that its diplomatic recognition matters, beyond its traditional role of upholding Taiwan’s sovereignty claims and for its partners to serve as proxies in international organizations. Rather, diplomatic losses in the Pacific signal a more aggressive China that threatens the interests not just of Taiwan but others and thus should promote multilateral responses. Such coordination may come in many forms. One option includes an informal multilateral effort among Taiwan, Japan, Australia, and the United States jointly to increase aid in the Pacific region, with the implicit acknowledgment that the donor countries tie this aid to continued recognition of Taiwan. The announcement by Australian Prime Minister Scott Morrison to provide the Solomon Islands with USD $250 million in infrastructure aid suggests his country may be willing to make similar offers to Taiwan’s other Pacific diplomatic partners as a means to limit Chinese influence. However, it remains unclear whether the Trump administration, one that declared cuts in aid to several of Taiwan’s partners in Central America due to the refugee crisis, would see the value in aid in the Pacific as enhancing US interests. In addition, Taiwan could attempt to expand free trade agreements (FTAs) among its Pacific diplomatic partners, similar to efforts that were historically helpful in maintaining relations with Central America. The potential inclusion of Australia may further stabilize such partnerships.

Regardless of tactics chosen, a Taiwan that allows the international community to view diplomatic recognition in the Pacific solely as an issue of importance between themselves, China, and the recognizing country in question risks allowing China to alter the strategic environment unchallenged.

The main point: The Solomon Islands will decide in less than 100 days whether to break relations with Taiwan in favor of China, a sign of growing efforts by China towards Taiwan’s remaining diplomatic partners in the Pacific. Taiwan’s long-term interests require tying these diplomatic battles to US and Australian security concerns in the region and encouraging a multilateral response.