China has been wielding increased influence and soft power in both the Freely Associated States of the Marshall Islands, Micronesia, and Palau, as well as the broader region of Oceania. The authors of this report examine the implications of these activities for the United States, particularly in terms of its defense and foreign policy interests.

America's Pacific Island Allies

The Freely Associated States and Chinese Influence

Derek Grossman, Michael S. Chase, Gerard Finin, Wallace Gregson, Jeffrey W. Hornung, Logan Ma, Jordan R. Reimer, Alice Shih

ResearchPublished Aug 6, 2019

The Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau, which make up the Freely Associated States — as well as the broader region of Oceania — have been the subject of increasing Chinese influence and expressions of both hard and soft power. The authors of this report examine the implications of these activities for the United States, particularly in terms of its defense and foreign policy interests. They also look at the actions of other regional and international powers in the Freely Associated States, and examine how those actions complement U.S. leadership.

Key Findings

U.S. funding to the Freely Associated States is key to strengthening engagement and preventing Chinese influence

  • The termination of grant-based economic assistance to the Freely Associated States could have a large impact on Chinese influence.
  • The Compacts of Free Association are a powerful tool that deny influence by actors other than the United States in Oceania.
  • The Pacific region is viewed by Chinese policymakers as a logical next step for the country's Belt and Road Initiative.
  • The conflict between Taiwan and China is played out at a micro level in the Freely Associated States, where two out of three countries recognize Taiwan.
  • The expiration of current funding streams from the United States to the Freely Associated States should serve as a catalyst for the opening of a productive new chapter in how the United States and its allies and partners engage with these countries.

Recommendations

  • The United States, its allies, and its partners should consider seeking ways to maintain appropriate levels of funding to the Freely Associated States.
  • The United States should also strengthen engagement in the Freely Associated States.

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Grossman, Derek, Michael S. Chase, Gerard Finin, Wallace Gregson, Jeffrey W. Hornung, Logan Ma, Jordan R. Reimer, and Alice Shih, America's Pacific Island Allies: The Freely Associated States and Chinese Influence. Santa Monica, CA: RAND Corporation, 2019. https://www.rand.org/pubs/research_reports/RR2973.html.
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This research was sponsored by the Office of the Secretary of Defense and conducted within the International Security and Defense Policy Center of the RAND National Defense Research Institute (NDRI), a federally funded research and development center (FFRDC) sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.

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