July 28, 2023 | Foreign Podicy

Pacific Overtures


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China’s rulers gaze across the Taiwan Strait and see an island where people are free, prosperous, and choose their leaders. They don’t like that.

They insist that the people of Taiwan must be ruled by the Communist Party of China. They vow that this is the future and that they will make it happen through the use of military force if other approaches fail.

But that’s not all Beijing wants in the vast region known as the Indo-Pacific.

Not for the first time on this podcast, we suggest that you reference a map because we’re going to travel to some far-off and remote lands.

Guiding us will be Cleo Paskal, a non-resident senior fellow at FDD who studies and writes about this region and has been sounding an alarm in Congress and elsewhere about Beijing’s plans to undermine America’s alliances in the Indo-Pacific — particularly with the small island nations of the region.

Joining us for the tour is Jon Schanzer, FDD’s senior vice president for research, who recently returned from a trip to Taiwan and Palau, one of the island countries in the western Pacific that we’ll discuss.

Episode transcript

MAY:                           China’s rulers gaze across the Taiwan Strait and see an island where people are free, prosperous and choose their leaders. They don’t like that.

They insist that the people of Taiwan must be ruled by the Communist Party of China. They vow that is the future. They will make that happen through the use of military force if other approaches fail.

But that’s not all Beijing wants in the vast region known as the Indo-Pacific.

Not, for the first time in this podcast, I’m going to suggest you get on a map because we’re going to travel to some far off lands, some remote places. Some of you’ve heard of, some maybe not.

Guiding us will be Cleo Paskal, a non-resident Senior Fellow at FDD, who studies and writes about this region and has been sounding an alarm in Congress and elsewhere about Beijing’s plans to undermine America’s alliances in the Indo-Pacific, not least with the small island nations of the region.

Joining us for this tour is John Schanzer, FDD’s Senior Vice President for Research who recently returned from a trip to Taiwan and to Palau, one of the island countries in the Western Pacific we’ll be talking about it. I’m Cliff May and I’m pleased to have you on board too here on Foreign Podicy.

Well, Cleo, good to see you in person. We don’t get to do that all that often. Now, if I remember correctly, you’ve testified twice fairly recently before congressional committees. And in that testimony, I think you pointed out that the United States, well is not just a Pacific power but a Pacific Islands country. Maybe just start by explaining what you mean by that. I think when you say Pacific, California and Hawaii, but what else?

PASKAL:                      So in Congress there are four delegates from Pacific Islands. There’s Hawaii, as you mentioned. There’s also American Samoa, there’s Guam, and there’s the Commonwealth of Northern Mariana, which includes islands like Saipan, which you may know, or Tinian. Tinian is the island which the Enola Gay took off from, for example, was the busiest airport.

MAY:                           The Enola Gay, which bombed Japan during World War II. And when you say delegates, they’re like congressmen, they participate in debates, but they don’t have voting rights, is that right?

PASKAL:                      So in the case of American Samoa, for example, they can vote all the way up until the last vote. And as you know, there’s a lot of horse trading that goes on right up until the last vote. So they actually have more power than you would think they would have. And one of the tasks force that I testified before was the Natural Resources Indo-Pacific Task Force, and the chairwoman of that committee is a Congresswoman Amata Radewagen from American Samoa. So they’re very much participants, engaged leaders in Congress and often don’t get the credit they deserve.

MAY:                           Okay. And Jonathan, you were in Taiwan. I don’t know if it was your first visit to Taiwan, but you also went with Cleo to one of these islands, to Palau, yes?

SCHANZER:                 Correct. It was my second visit to Taiwan. We went on a FDD delegation where we actually brought a number of former national security practitioners from Israel to visit the island and to exchange thoughts about what it’s like to be a small country under threat of attack from larger powers. And it was fascinating to watch the Israelis engage with the Taiwanese and to hear both of their thoughts. I think the Israelis certainly have a lot of practice in defending themselves against aggressors. But from there, that’s when I think the eye-opening experience really began for me. Cleo introduced me to Palau. This is a country of less than 20,000 people-

MAY:                           That’s a small country.

SCHANZER:                 … that some people may have heard of because maybe they like deep sea diving. There’s terrific diving there. But there’s also this incredible rich history. The U.S. fought some pitched battles against the Japanese during World War II. There’s actually a great book that I recommend to everyone called With the Old Breed. It’s an older book written by a veteran of the Battle of Peleliu, and he talks about the brutal battles that America waged on this island. And Cleo and I had a really a fascinating eye-opening trip where we saw up close and personal, hearing from Palauan officials about the extent to which China is trying to directly undermine America’s influence. And quite frankly, the very alliance that it has forged with Palau, and just to be clear this is a country that is 500 miles from Taiwan, it would be a crucial area if war were to break out.

MAY:                           Well and this is just an important point to recognize historically, that when the U.S. went to war with Japan, it was because Japan, among other things, wanted to take over the entire Pacific. They wanted to dominate the Pacific as Germany wanted to dominate Europe. So how did we fight Japan? We had to fight by island hopping in this region. And by the way my father, I think as a 19-year-old, I don’t think he’d ever been out of Brooklyn before, he was sent over to do exactly that. He was building airstrips on the various islands.

PASKAL:                      Do you remember where he was?

MAY:                           So the ones he talked about most, was Papua, was New Guinea, I don’t know, he called it Papua, but he was.

PASKAL:                      Papua New Guinea. Was he in Bougainville?

MAY:                           Bougainville. And he was in New Guinea and then the Philippines. And I just remember he didn’t really like New Guinea a whole lot. He found it kind of scary place. He loved the Philippines and he loved the Filipinos, because the Filipinos were fighting side by side with the Americans and hated the Japanese. So I remember that from my childhood my father talking about all that. But let’s go back to the threats because your congressional territory, you say the threats are real and urgent. And I remember you quote one senior Chinese official telling a U.S. admiral, Timothy Keaton, “Okay you take Hawaii east, back to California, we’ll take Hawaii west.” In other words, we’ll just split up the Pacific this way. Isn’t that good enough? Which means the Americans would … means a lot, not just to those islands and those nations that have been aligned with America for a long time, talking about Palau.

John, you recently did an interview here at FDD with the President of Palau who was born in Maryland, if I recall because his father had come over and married somebody. So they have long ties, but the Chinese are saying, yeah, that’s fine, but we’ll take over now because this should be part of our empire. And I want to stress that I do believe that China is an empire and it intends to be an expanding empire, as Putin intends for Russia to be an expanding empire. That’s why he has invaded Ukraine. And Khomeini and the Islamic Republic of Iran, when they talk about the Islamic Revolution, they mean to expand their empire. I could go on with some other revanchists and neo-imperialists, but those are the three most important. So talk a little bit about the Pacific.

There’s two groups that I didn’t really understand. There’s the Pacific Islands of America, PIA. I don’t know how you, and the U.S. Freely Associated States. And just make sure we’re clear on what those are and then we’ll go into how they’re being threatened in several ways by Beijing.

PASKAL:                      Sure. So if you draw a triangle between Hawaii, New Zealand, and Japan within that zone, which is the zone, you mentioned what the Chinese said about pushing the U.S. back to Hawaii, and that’s what the Japanese did during World War II. The bombing of Pearl Harbor, was to try to say, you stay Hawaii east and we’ll take the rest, right?

MAY:                           Right. Just in other words, bombing Pearl Harbor will knock you out. They won’t have a Navy anymore. So you can stay in Hawaii. Maybe the Japanese would have eventually invaded, maybe not, but they said stay out of the rest of Asia. It’s ours.

PASKAL:                      That’s right. And if you look at the full extent of where Japan went pushed in the Pacific during World War II, Imperial Japan, that’s why you had people in Bougainville and Papua New Guinea, Solomon Island, all the way down, that’s very close to the coast of Australia. The Japanese got very far out. And what the Chinese are trying to do is replicate that through political warfare. So they’re buying their way in instead of invading their way in. But you’ve got this big triangle and it’s very important to disaggregate. We tend to think the Pacific Islands and they’re all the same, but there are, from an American strategic perspective three levels. The first is islands that are America, Guam is America, Commonwealth of Northern Mariana is America. It’s American citizens, American currency, it’s America. So that’s the kind of Pacific Islands of America. They share a maritime boundary with Japan. The U.S. has a maritime border with Japan all the way there.

The second is these three Freely Associated States. The term Freely Associated States comes from this agreement that the U.S. has with Palau, Marshall Islands and Federated States of Micronesia, which is called the Compact of Free Association. This agreement, it’s bilateral with each of them, is why the President of Palau is in Washington now. Every 20 years the financial component of that agreement is renewed. These agreements give the U.S. unprecedented, there are no other countries in the world that give the U.S. this kind of access. The U.S. has uncontested access on land, in sea, in the air in these three countries. And the U.S. has strategic denial. They can block any other country from operating in that zone. These three countries cover as much of the Pacific as the size of the continental United States, and they stretch horizontally between Hawaii and the Philippines and up to Guam.

SCHANZER:                 One thing that I think struck me when we were in Palau, one of these compact states is the extent to which they have embraced certain key facets of American commerce and bureaucracy. The fact that they trade in the US dollar, that’s the currency. But also, I’m fascinated to see there was an American post office there.

PASKAL:                      The relationship is incredibly deep and they use U.S. educational models. They have relatives in the U.S. This compact agreement allows those citizens to come and work and live in the United States, unencumbered. They can join the US military. So yes, there are these defense rights, but it’s very much a melding of relationships. And what the president said while he was here at FDD was these countries, this zone, this massive zone in the middle of the Pacific that gives this freedom of operations to the US that goes from Hawaii to the Philippines, this corridor of freedom across the middle of the Pacific was administered by Japan for 30 years. From 1914 when they got them off the Germans through the League of Nations until 1944 when the Marines showed up, they were administered by Japan and the Japanese set up schools, set up administrative districts.

They didn’t have to fight to get those islands. They had those islands. They were the launch point for the attacks elsewhere. And what the president said was, look, we had the Japanese there for 30 years and a quarter of the Palauans have Japanese blood and linkages. We’ve had the Americans for 80 years. So imagine how close we are to the U.S. in all of that time and all those relationships. Also Palau recognizes Taiwan, so they’re incredibly important. If you recognize Taiwan, that means you don’t have a Chinese embassy. And the Chinese embassies are the forward operating bases of the Chinese political warfare machine that includes the intelligence collection and influence operations, which is why we closed down, or the U.S. closed down the Houston consulate. Because these Chinese diplomatic installations are incredibly pernicious and can be a base from which you can corrupt a country from the inside, so recognizing Taiwan blocks that.

MAY:                           And I read, and it was either in your testimony, one of your pieces where a Chinese official says maybe to a Palauan, maybe it was another, I can’t remember, “If you recognize Taiwan”, he said, “that is illegal.” Which is an amazing thing for one country to say to another, because unless it’s somehow an international law he’s saying it as an imperial power. Now do I have that correct?

PASKAL:                      Yeah, he said that to the president of Palau. Yeah. And that’s this thing about this creating of this lawfare, this setting of precedence. It’s not taken seriously, this whether you recognize Taiwan or China and people present as, oh, it’s just money flipping back and forth. But it’s not, it’s incredibly important for this sort of Chinese imperial expansion that you’re talking about. But operationally, it’s also incredibly important, which is why. So there are these three countries. There’s Palau, Marshall Islands, and Federated States of Micronesia. Marshall Islands and Palau recognize Taiwan, the third, Federated States of Micronesia, recognizes China. But in March of this year, then President of Federated States of Micronesia wrote a letter where he described the unbelievable PRC political warfare in his country, including funding separatist movements and all sorts of stuff.

And he said, “I’ve been talking to the Taiwanese about wanting to recognize Taiwan and this is what it would take. Because the Chinese will pull their money, we need some support.” And I was in Taiwan not long afterwards, and the Taiwanese basically said, “We can’t move without State Department.” And what seems to be the case is State Department was not interested in liberating a country from that Chinese political warfare and putting it into the Taiwan zone, where you would’ve had from Hawaii to the Philippines, a zone across that all recognized Taiwan. Which meant you could do military exercises with Taiwan, you could do Quad Plus, all that stuff. So the battle now is on the political warfare battlefield. The DOD knows what the stakes are, but State seems to not be fighting back on the political warfare front to the same degree that China is attacking on the political warfare front.

MAY:                           A couple things I wonder about. One is, wouldn’t it make sense for any of these countries that are so close to the United States to simply adopt the same policy that the United States has had, which is a policy of ambiguity. It says we recognize theoretically the concept of one China, but we totally oppose anything being done through military means to bring Taiwan under the authority of Beijing. I think I’m describing the U.S. policy correctly. It’s a vague policy, but I think purposefully so.

PASKAL:                      Yeah. Well, what the President of Palau says is, Taiwan’s a country and I’m happy to recognize China also. But China is saying I can’t do both. So I’m happy to do both, and it’s clear.

MAY:                           Are the Chinese doing what they’re doing mostly through coercion or seduction? In other words, one way for the Chinese is to go and say, look, here’s what we can do for you. They’re doing this in Africa and a lot of other places. We can build a stadium for you. We can build a harbor for you. We have a bridge and road. There’s all kinds, we can do … Of course, it’s not wonderful how they do it because they bring in their own workers. The work is often shoddy. They often say you don’t have to pay for this right away, but it’s not free. There’s a loan. Then they use that loan against them. There’s that, but there’s also more direct coercion such as threatening them the way Taiwan is threatened, such as using the media in a warfare campaign. Just talk about the various ways that China is trying to enforce its will in these countries.

PASKAL:                      So the President of Palau, as I mentioned, wrote that letter about what China was doing in his country. And so this is the president of a country describing what China’s doing. And essentially, it tries to undermine the mechanisms of state and transparency and accountability that might act as barriers to Chinese influence operations. So in the case of FSM, for example, they wanted to get in their vaccine.

MAY:                           FSM?

PASKAL:                      The Federated States of Micronesia.

MAY:                           Gotcha.

PASKAL:                      Okay. So because these three countries are so close to the U.S., the U.S. provided them with all the vaccines that they needed for COVID, but China wanted them to take their vaccine.

MAY:                           Sinovac.

PASKAL:                      Yeah. And the president said, no thank you.

MAY:                           And you’re rightly so, because Sinovac was not as good as the American vaccines.

PASKAL:                      I think that’s putting it-

MAY:                           Mildly.

PASKAL:                      Yeah. And so then the pressure continued and one of his ministers really insisted on it. And so what he agreed was that Chinese citizens in the country could take it. And then suddenly he finds his own country has a policy of accepting it as legitimate. He didn’t make that decision. Somewhere, he lost control of part of his government to Chinese influence operations. And so it weakens, I think of it as entropic warfare. It creates a state of chaos, fragmentation. It disintegrates the target country to the point where the Chinese influence operations can become more effective. Ultimately, what they try to do, we saw in Solomon’s is find a strong man that they can back including potentially with PLA troops on the ground. The prime minister of Solomon’s just came back from China and said, it’s a nine hour flight from China if I need backup. He’s actually gamed it clearly.

MAY:                           Go ahead, John, talk more about this.

SCHANZER:                 Yeah, and just to put a finer point on it, what Cleo and I heard when we were in Palau just a few weeks ago, and what we saw was that the Chinese were trying to sponsor certain candidates for elections. They were taking out long-term leases on people’s homes, properties. By the way, sometimes near sensitive areas where there were American personnel but essentially flooding the economy with cash. We were watching private charter flights coming into Palau with Chinese citizens, hearing about some that stayed on the island, didn’t return. There was a sort of gray area just in terms of who was coming in. They weren’t abiding by the same rules as people that would come through normal flights. Just seemed to be a lot of activity where it looked like China was trying to burrow in. And by the way, there are other things that they’ve done, which I think shocked me.

For example, we learned recently that Huawei is now the backbone of the telecommunication system in a country that is allied with the United States. And the U.S., at one point said, oh okay we’re going to get rid of this. But then didn’t mitigate because of COVID. And so it’s been years now. While the U.S. is actually putting military hardware in this country, you’ve got the Chinese exfiltrating information because they’re keeping their servers back on the mainland. So you get a sense of the different ways that China has been digging in, in really what is a very vulnerable country and this is just one of several in the region that Cleo has been tracking.

MAY:                           And I’ve got to guess that the Chinese, the Communist Party, finds various ways to mettle in elections. It can’t be hard to do. You can pick a candidate you like and make sure that candidate has a lot of money and it’s unlikely that the local law enforcement authorities are going to figure that out or prosecute that in any way. But if they do or they begin to, you can bribe them. It’s hard to prove bribery, but I have to believe that the Chinese do not scruple against bribing if that’s in the interest of the Chinese Communist Party. Am I correct in that assumption?

PASKAL:                      And it’s easy to prove.

MAY:                           Oh, okay.

PASKAL:                      There was a case recently where a couple of Chinese bought Marshall Island citizenship and wanted to set up-

MAY:                           Law citizenship. That’s pretty easy to do?

PASKAL:                      It seemed to be for them and wanted to set up a country within a country. They were openly saying this was a two systems, one country type thing. They brought legislators from the Marshall Islands to Hong Kong. And at that event in Hong Kong, the Marshallese said, isn’t this two systems one country thing great? We want to set up a Hong Kong type structure in the Marshall Islands. This is home of the Kwajalein Ronald Reagan missile defense test site. This is a part of that corridor of freedom across the Pacific with the compact. And they came back and came within one vote of getting it passed in the legislature in Marshalls. Very long story short, they ended up getting charged in New York for a Foreign Corrupt Practices Act because they were running the money through an NGO that was UN-affiliated so they could get ahold of them. And the amounts involved were very small, like $7,000, $22,000.

And what did they do? They took a plea deal. The FBI gave them a plea deal and they got credit for time served. And one of those two has served her time and the U.S. has deported her back to the Marshall Islands where she’s walking around free. So you have in the Marshall Islands, somebody who’s been convicted of bribing members of the Marshall Island’s government that the U.S. has sent right back. And just to your point about prosecutors and things like that, I’ve increasingly come to the conclusion that one of the most useful things the U.S. can do is send lawyers, investigators, FBI agents, to help the honest people clean up their system. The Attorney General of Palau is begging for somebody to apply for the special prosecutor’s job who has the courage to go after the corrupt people in her country.

MAY:                           And one thing I want to emphasize, I think you brought it up, but I want to make sure people … It sounds like there are two basic reasons we should really care about these areas. One is, it has geo-strategic importance for us particularly if we’re trying to protect Taiwan from being overtaken and essentially colonized by Beijing, which would be bad for the U.S. for a lot of different reasons, which we needn’t to go into here. And the other is, basically these are people who are friends and cousins and relations in some cases actually Americans, have been for a long time and want to continue to be, and if that’s their will, why would we turn our … It’s a pretty bad thing to turn your back on people who are your friends, your cousins, and your fellow Americans, even if it’s a different relationship than it would be if they lived in West Virginia or Nevada or something like that. We may not know as much about it, but those are the two main reasons, I guess. Right?

PASKAL:                      Exactly. And under Ronald Reagan this arrangement was set up, Reagan said, you’ll always be family. Very, very clear about it.

MAY:                           Family’s the way he put it.

PASKAL:                      And I just say, this isn’t just about Taiwan. If you want to resupply the U.S. forces in Japan or in South Korea, you need to get through this area. This is the route.

MAY:                           Right. John, you talk about that. Also this whole idea of the first island chain, second island chain. I think people don’t get that.

SCHANZER:                 On that issue, I think the structures that everyone in the China watching space talks about are these first island chains, the ones that sort of are immediately off the coast of China. And then you go one further, and these are the sort of layers of defense that we talk about. And these are defensive structures, longitudinal. We have to think about them going north to south. What Cleo has opened my eyes to is that if and when we wanted to counter an aggressive Chinese military, let’s say China decides to go on the offensive, wants to conquer Taiwan, and then decides from there that there are other territories in the Pacific. The way that we are going to be able to push back the counter-offensive will need to come from California, from Hawaii, and we’re going to need to go on a latitude. Pushing back will come from the east to the west.

So this is, I think, the way that we need to conceive of this right now. Those island chains are only part of the story. There’s the resupply lines and the areas where you’re going to have hardware and personnel and these islands are going to be exactly that. The other thing that I think is also worth noting is, and I noted this to Cleo very soon after we started doing our research on the ground there, what dawned on me was that there’s this famous game that originated in China. Everybody has probably heard of it by now called, Go. And the idea is you can flip a little piece and it’s either black or white and you represent one color, your enemy or your adversary represents another. And the idea is to surround the enemy and to turn all of the territory within to your color. And if you think about it, this is really what China is trying to do in Oceania, in the Indo-Pacific region.

They are trying to capture these territories. They’re not doing it by way of the military right now. They’re doing it through influence operations. They’re doing it through flat out bribery and corrupt practices. And in some cases, they’re winning. In some cases, they’re gaining leverage. And the question is, is America even playing in response?

MAY:                           Right, right. And I guess your answer, why wait, is that we’re not. We really don’t have much of a strategy for the Indo-Pacific. Do we? The current government or the previous administrations?

PASKAL:                      So yeah, there have been some advances. There are some embassies that are opening up in the region. The defense deal with Papua New Guinea, that sort of thing. So there seems to be a growing sense in DC that this is important, which is why there were hearings recently. Many more than there have been in the past. I’m not sure there’s as much of an understanding of how urgent the situation is. So of those three Freely Associated States that we talked about, the one in the Federated States of Micronesia, where we had the president who wrote about the co-option and tried to recognize Taiwan. He lost his election. The other two are signing their agreements, their renewals, but both of them have elections within the next year. In any of these three countries, you get the wrong person as president, they de-recognize Taiwan, they break the compact or undermine the compact. And this is the other thing China’s doing is it does things just below the threshold. So U.S. Coast Guard ships have not been able to land in Solomon Islands or Vanuatu.

MAY:                           Really?

PASKAL:                      Yeah. Nobody picked up the phone on the other side. So you can’t say they were blocked. This is a very Chinese way of handling it. And you can be racist and say, oh, those Pacific Islanders, they don’t know how to handle stuff. They knew exactly what they were doing. Similarly, in Papua New Guinea, there were two INDOPACOM humanitarian assistance trainers who were supposed to go, and this was not long after the US signed the defense deal and their visas never came through. So you’re starting to see this blocking of U.S. ability to engage, deploy, support, build friendships in different locations across the region. It’s happening at a threshold that doesn’t trigger the sort of response that would be necessary. Which is why I would again argue that if we are going to fight back the first thing you need to do, the biggest thing you need to do is go after the dirty Chinese money.

Right now there’s no downside to taking Chinese bribes. You don’t lose your status, you don’t lose your assets, you don’t lose your political position. It’s only beneficial. So if you’re immoral, it’s logical to take the Chinese money. Unless that cost benefit analysis changes, everything else we do, all of those other, opening of the embassy, signing the defense deal … If the U.S. is building a base in PNG, but the PNG government gets bought out by China, you’re building a base for China. So until you get rid of that corruption element, which is what we should be doing to help our allies anyway to help with democracy, transparency, and accountability, then everything else will have a very hard time being as effective as it should be.

MAY:                           Another important player in this part of the world is a close American ally, fought with American almost every war, and that’s Australia. Australia has an interest in the Pacific as well. What is Australia doing? How much is Australia doing hand-in-glove with the U.S.? Talk about Australia’s role in all this.

PASKAL:                      So in the case of the Solomon Islands where you have this prime minister who switched the country from Taiwan to China, signed the security agreement with China that will allow for PLA deployment, just came back from a week long trip to China where, on landing in China, he said, “It’s good to be home.” And when he came back in the context of Chinese troops, he said, “It’s a nine-hour flight away.” That guy takes a ton of Chinese money and a lot of that money, within his larger group is run through Australian banks, Australian real estate. Australian intel community has what it needs to charge the guy and to make it so he can never get another visa, to throw him in jail, to show cost for selling out his people and his country and western strategic interests in the region, but they haven’t done it.

MAY:                           Why, do you think? It seemed to me that what happens at least in places like Papua, New Guinea matter a lot to Australia and the Australians have been threatened and bullied by Beijing over the recent years, for sure.

PASKAL:                      Yeah. So Australia had a moment of clarity after the Darwin Port issue. So the U.S. Marines wanted to set up this kind of rotation, this training center in Darwin in Northern Australia. Northern Australia is important because that’s, again if you look at your World War II map, that’s where you can deploy into the Pacific from. And the Australians gave them a really hard time and eventually agreed to kind of a small amount that rotate through around this Port Darwin. And then they leased the whole damn port to a Chinese company for 99 years.

MAY:                           For 99 years?

PASKAL:                      Yeah.

MAY:                           Oh, that’s giving it away. Yeah.

PASKAL:                      And so that’s when the Washington strategic community sort of said, “Hey Australia, what are you doing?” And in each of these countries, the defense and security community are very concerned about China, but the political and business community may have other interests.

MAY:                           Right.

PASKAL:                      And in this case, this Darwin situation gave enough space within Australia for the intel and defense community to gain the upper hand in the internal discussion about what to do about China. And you started to see a bunch of leaks coming openly from the intel community into the Australian media about who was on the take in the Australian business and political community. So that allowed them to clean up domestically quite a bit of the really corrupt Australian Chinese linked operatives. They didn’t do it in the Pacific Islands, they did it domestically. And they did it for a limited amount of time. It’s been a long time, in Australia, since there was that sort of cleaning up, overt cleaning up of their system. So the Chinese influence operations, they sit, they wait, they change colors, and they come back in other forms. And I’m not sure how much of a effect that is having on the Pacific Island policy, but I can say because it’s apparent, this is why U.S. had to go and sign its own defense deal with PNG. Why it’s reopening embassies-

MAY:                           PNG, meaning Papua New Guinea, right. By the way, PLA, that’s People’s Liberation Army of China. Just in case you didn’t know that.

PASKAL:                      Yeah. I’m sorry.

MAY:                           No, that’s okay. Most people know, but just want to make it easy.

PASKAL:                      We wouldn’t be having this conversation if Australia was doing what it needs to do for our allies in the Pacific Islands.

MAY:                           And it’s also for Australia, for Australians. Australia does not want to be Finland-ized within that region. By Finland-ized, I mean a nation that is theoretically independent but has to do what the bully next door tells them to do. That’s no longer the case with Finland, by the way, because Finland is now part of NATO. But it was the case for Finland all during the Cold War and my most recent column is about exactly this.

PASKAL:                      And let’s not get started on New Zealand.

MAY:                           Well, I was just about to get started on New Zealand. Tell me about New Zealand.

PASKAL:                      Where the prime minister would refuse to call Xi a dictator recently. New Zealand is … There are very big business interests involved in all of this. And my metric is, if you’ve got a country, like Australia currently is, talking about wanting a free trade or improved trade relations with China, that means that and doing it openly, what are they going to give away in order to get that. And in the case of New Zealand and Australia, they may be willing to give away strategic positioning in the Pacific Islands in order to get their own economic benefits out of a deal with China.

MAY:                           Australia’s not fully on board with us and with the people of the Pacific Islands. New Zealand certainly isn’t. All right the other big player of course is India. This is the Indo-Pacific, India is a very major country. Talk about India’s role in all this.

PASKAL:                      India’s really interesting. And before we talk India, just so we don’t miss it, Japan especially —

MAY:                           I was going to get to Japan!

PASKAL:                      Yeah. So just quickly, Japan’s been a great partner in the region.

PASKAL:                      They’ve done a lot of very important infrastructure projects. They’re well respected, they’re quiet, they know what’s going on. They do a lot of good work. India is interesting. You talked about elections and how to game elections. India has been seeing in the Indian Ocean Islands the same thing that we’re seeing in the Pacific Islands. So in Maldives, Sri Lanka, obviously, Seychelles, they’ve seen these Chinese influence operations.

MAY:                           Right, right.

PASKAL:                      So they know what it looks like-

MAY:                           The Chinese are trying to influence all the way, they’re now going west to the Seychelles. And Maldives is close to Sri Lanka, south of India. Again if you have your maps out this is helpful. So it’s not just in the Pacific, it’s all the way west as well. Of course, I should remind people, the Chinese are all over Africa too. And as I see it, as a neo-imperialist effort to stripping resources and exploiting people in Africa. And all the people who shout and scream about 19th century imperialism and ignore 21st century imperialism, strike me as either very ignorant or very hypocritical. Although maybe I should let it go.

PASKAL:                      Yeah, yeah. No, their economic model is fundamentally parasitic. So when you talk about decoupling or whatever, it’s not, it’s like deworming. They come into your system and they suck out your capital, your intellectual property, they leave you weak, leave the host weak. It is fundamentally biologically parasitic. And you talk about Africa, how do you get to Africa? You have to get through the Indian Ocean islands. And how do you get, because they’re also doing it in Latin America. So how do you get to Latin America? You have to go through the Pacific Islands. Actually, we know in our heads that they’re in Africa, they’re in Latin America, but how do they get there? They get there through these islands. They’re stepping stones.

So just one kind of anecdote which will give you, the Indians are very good at political warfare, at fighting political warfare. So after their 20 men were killed in Galwan in June of 2020, two weeks later, the first thing they did, the first major retaliation was they banned 59 Chinese apps, including TikTok and WeChat. Because they knew they were using the apps to harvest the metadata to refine their AI systems. Harvest the Indian metadata to refine the Chinese AI systems using the intel they were gathering off the phones for influence operations and blackmail. By doing that, they knocked $6 billion off the valuation of ByteDance. They created space in the sector for-

MAY:                           ByteDance owns TikTok.

PASKAL:                      Yeah. They created space in the sector for Indian competitors. It was really, really smart. And what they saw around elections was the Chinese wanted to get their presidential candidate in in the Maldives, and the Indians looked at the ground situation in the Maldives and said, he doesn’t have enough votes to win, but he won. And when they took a proper look at what had happened, what had happened was Chinese money had bought Maldivian expat votes in Sri Lanka to do mail-in voting for the candidate in the Maldives.

MAY:                           That’s rather clever.

PASKAL:                      And that’s relevant for a place like Marshall Islands or Palau that has a very large voting population in the United States. Nobody’s monitoring what money is going in to buy those votes.

MAY:                           Wow. All right. And by the way, Indian Prime Minister Narendra Modi recently went to Papua New Guinea. What was his mission there?

PASKAL:                      This was really interesting. So they’re taking a look, as mentioned, at this whole region, the whole Indo-Pacific region combined and looking at the World War II map. The Japanese came up down through the Pacific Islands, then across kind of the Straits of Malacca and right up in what are now the Indian Islands of Andaman and Nicobar. So they know that expansionist Asian power can come up through that region, and they’re worried about western mismanagement in the Pacific Islands. And they know that the economic solutions that are being offered by the west are mismatched for the kind of economies that you have in the Pacific Islands. Pacific Islands are developing economies. Our first world economies actually don’t match very well. The Indians can do the development on the ground at lower cost, and they can compete with the Chinese where an Australian can’t.

So they spent months setting up this Pacific Island leaders, Prime Minister Modi meeting in Papua New Guinea. They set up a secretariat. The Prime Minister Modi was supposed to be there for two or three days. They were going to bring a big Indian business delegation. And they paid for, I think, five people from each of the Pacific Island countries, presidential level, to come to the meeting. And then President Biden announced he was going to come right in the middle of it. So this was to basically have a photo with the Pacific Island leaders that the Indians had paid to bring to Papua New Guinea. So the Indians couldn’t appear on a stage with Biden because their whole pitch was G20, this is a third way this isn’t the west, this isn’t China. We can do this south-south cooperation stuff.

So Prime Minister Modi scaled back his visit to whatever it was, 18 hours, and the business delegation didn’t come. And then President Biden canceled, and Secretary Blinken went. And so you had Modi appearing in the morning on May 22nd with a photo with all the leaders and Blinken in the afternoon. And it was-

MAY:                           Sounds like a screw up.

PASKAL:                      I hope it was. That’s the best case scenario.

MAY:                           That’s the best case scenario. Well, you think that maybe the U.S doesn’t want India to do this? It seems like something that the U.S. should quietly encourage.

PASKAL:                      Yeah, they should. Like I said, I hope it’s a screw up. I know that there are other interests. The Australians weren’t involved in the Indian one. Australia and New Zealand would’ve liked to have been included through the Pacific Island Forum and the Indian thing. And the Indians said, no, we want to just deal with Pacific Islands. So I really don’t know what went on behind it. But you’re asking what was India trying to do? India’s trying to actually get in on the ground. They provided a list, a 12-point list of things they’re going to do. And if they actually do them, they’ll be very helpful.

MAY:                           Yeah, go ahead, John.

SCHANZER:                 Cliff, you and I have talked about this and I think it’s worth noting here on the podcast that it’s fascinating to me right now. You look at India and the way in which it is positioning itself as a bulwark against an increasingly aggressive China. And it is shocking to me to see, and maybe I shouldn’t be shocked at this point, to see the way in which there are actors in the United States purportedly professing the desire to safeguard America’s democratic values. And they’ve gone all out to try to vilify the Indians. Protesting Modi’s visit at a joint session of Congress reminds you a little bit of the way that you see the same thing right now with members of Congress boycotting Hertzog’s visit to Congress. A very similar playbook right now. And it truly is remarkable because if you think about the value that India holds, the largest democracy in the world, it has actually fought kinetically, it has fought the PLA.

This is a country that is absolutely going to be an asset for the United States. And we see elements within our country right now opposing it. And it really does, it surprises me a great deal that there’s even a place for voices like that right now. And it’s not to say that India’s perfect, it doesn’t mean that some of the problems that they’ve had with human rights have just gone away. But at the end of the day, when we think about American interests, India is a crucial player right now as we build up toward this great power competition.

MAY:                           I would also just add this, India as a multicultural democracy, has its difficulties as Israel does. Minorities in Israel, Arabs are the largest minority. Minorities in India, the Muslims are the largest minority. It may not be easy for them, but the minorities in India and Israel have more rights than say the minorities still remaining in Pakistan, which are not many. Because at Pakistan’s birth, if memory serves, about 30% of the country were non-Muslims. They were Christians, they were Parsis, they were-

PASKAL:                      Hindu.

MAY:                           Hindu and Sikhs. And because of the oppression. They’ve been forced out. I think it’s less than 3% now. The 3% that are left are still very much oppressed. But somehow, that doesn’t upset people just as it doesn’t upset people in Muslim countries that the Uyghurs, the East Turkic people of China part of the Chinese empire, that they’re so oppressed that the American government, under Democrats and Republicans, say this is genocide, what they’re doing to them. That’s somehow okay. And yet the focus is again on Israel and is on India. Again which doesn’t mean everything’s perfect, but it mean there’s a very strange double standard within what we laughingly call or advisedly call the international community. I think that’s more to say about that, but I wanted to stress that point in regard to what you were saying.

You touched on Japan but didn’t say as much as I’d like you to. One thing about Japan is Japan does seem to be getting involved now, committing to not being a pacifist country to saying, okay, our military needs to do more if we are going to protect Taiwan. And if we are not going to be isolated within the Pacific that is dominated by the Communist Party of China, we as Japan have to do more than turn to the Americans and say, is it okay, dad?

PASKAL:                      Yes. And they are doing it not just through military, but also again, because China is coming in to many places through the economic doorway. They’re trying to help build up the economies of the region. So they are doing targeted infrastructure investment and things like President Whipps of Palau said he’s spoken to Prime Minister Kasitah twice about direct flights, bring in the Japanese tourists so you don’t have to take the Chinese tourists and they need some improvements to the airport. And it looks like Japan may be helping with some of that. So they’re doing it in a very multi-sectoral fashion that is effective and respected on the ground. And they’re also, very interestingly, doing a lot of work with India quietly on the sensitive parts of India, including in the Northeast. So Japan doesn’t trumpet much about what it’s doing, but what it’s doing already is well thought out, well-funded, and tends to be well executed.

MAY:                           Does the Philippines have much of a role in all this?

PASKAL:                      It could. The Philippines is the unacknowledged big Pacific Island country, so if you go to a place, like when we were in Palau, there are a lot of Philippine staff. I don’t know if you saw, there are a lot of Filipinos who are working across the region, which means they actually have the potential to have a lot of intelligence gathering across the region and are in various positions of influence. And they could be much more incorporated into the defense, security, and intelligence understanding support and bolstering of the region.

MAY:                           And you would say the leadership of the Philippines recognizes the threat that they face from Beijing at this point and wants to respond to that and understands that America is a better friend than China to them?

PASKAL:                      The new administration is, of course, inviting in the U.S. And so what you’re seeing is you’re seeing a resurrection of the World War II map. And in many cases, actual specific pieces of infrastructure – the two runways that President Whipps of Palau was talking about at our event the other day are old Japanese World War II runways that are being resurrected. And in some cases, it’s old US World War II runways. The geography doesn’t change. The deep water ports are the same deep water ports. That’s why when Solomon switched from Taiwan to China, the first place the Chinese tried to lease was Tulagi, which was the old British capital because of the port installation. And it was where the Japanese first attacked. So we know this playbook and the Japanese were there, were in the north at least for 30 years. The Chinese have been studying what the Germans did in the region, what the Japanese did, what the Americans did, so as not to replicate the mistakes and to identify the most valuable components. And they’re doing it not just militarily, not just through this economic stuff, but through a lot of criminal activity. They’re using the triads, they’re using every single-

MAY:                           Triads being Chinese-based gangs, which the Chinese Communist Party, they have a hand in the triads. They don’t try to wipe them out, they try to control them and utilize them for various things.

PASKAL:                      Yes. They can’t operate without CCP approval. And one of the ones, Broken Tooth who has actually been sanctioned by the U.S., operated out of Palau.

MAY:                           Broken Tooth, it’s called?

PASKAL:                      Yeah. Well, he’s a guy.

MAY:                           That’s a guy. He’s named Broken Tooth.

PASKAL:                      Yeah.

MAY:                           It’s very colorful. Okay.

PASKAL:                      Yeah. The nastiness, the violence doesn’t have to come through the PLA, it can come through organized crime.

MAY:                           Well, then that’s something that, of course, that Putin does as well. He uses organized crime to help him. Talk about, explain to people in case they don’t know what the Quad is and talk about whether it’s coming along or whether it’s not. It’s not a Pacific NATO yet, certainly.

PASKAL:                      The Quadrilateral Security Dialogue, that’s the kind of formal name. It’s Japan, the United States, Australia, and India. They worked together on vaccine diplomacy, initially sort of trying to work the kinks out. Different members are more willing to make it more military focused than others. And it’s not the ones you think. India, at least informally, talked about having a Quad headquarters in Andaman and Nicobar Islands, which is a very strategic location.

MAY:                           Near India.

PASKAL:                      Each of the four countries has strong bilateral relationships with many of the others, but not all of the others. Legally, yes, but some of the linkages are weaker. So India Japan is very strong. Japan-US is very strong. US-Australia is very strong. The India Australian one is somewhat weaker. And if Australia, as mentioned, keeps talking about wanting to have trade deals with China, then that creates concern with other Quad members about how. But their defense intelligence community is doing ACAS, which is this submarine deal with the U.S. and the UK. So you’re getting these mixed messages out of Australia. So Quad is useful because it brings them together and there are certain areas where some talk can happen around things, especially, I would say, in the cyber realm or intel sharing or satellites and stuff like that. But it’s still in development and it’s only as good as its weakest partner fundamentally.

MAY:                           So conclusion, at least for today, just reiterate or emphasize or say new what your advice, and I’ll start with you, John, would be to Congress and the administration in regard to the Indo-Pacific, that’s very important, but a part of the world that a lot of people don’t know about, and I’m not sure the US government is focused on in any concerted way.

SCHANZER:                 No, and I think that that’s kind of the key here is we’re talking about really low population countries. Countries that don’t have much in the way of exports. They’re not on anyone’s radar. Most people could not point to Palau or the Marshall Islands on a map. But I think it’s interesting, for those that can, they’re I think typically the ones who have learned their history. Going back to World War II, looking at the way that great powers behaved during a time of intense conflict. And we see how it was important back then. And I do think that we can learn a lot from history looking back at those battles back then why these countries are important now. So I think that’s point one.

Point two is the economic element here. In my view, China appears to be able to go on the offensive with small amounts of money, really tiny amounts of money. Micro bribes, if you will. And these are meaningful to the population in these small countries that lack the resources. They don’t have the industry. And so China can go in and offer really paltry sums of money to sway various politicians, to buy politicians, to be able to lease property and to be able to burrow in. And so when we think about the way to counter this, yes, there is going to be the infrastructure that the United States is likely going to have to build, certainly on the Compact states where they have free reign essentially to do so. But making some small investments, we’re not talking about breaking the bank here. We’re talking about rounding errors in the State Department or Pentagon budgets that could probably help bring the populations back squarely into the U.S. camp and turn them into assets in this fascinating battle that Cleo has introduced me to over the last several weeks.

MAY:                           Cleo, any last points you want to make?

PASKAL:                      Yeah, sure. And thank you very much, John, for having come out. And it’s very helpful to have people who have expertise in different areas looking at it for the first time or renewed interest in it because it shows things that others may not have seen. And so I was very grateful that John came out and I saw a lot of things through his eyes that were very helpful. The first step for the U.S. administration is to not just say the Pacific Islands and assume that they’re all the same. It’s sort of like saying Europe and you’re treating the relationship with the UK the same as the relationship with Portugal. The relationship that the U.S. has with the Freely Associated States is unlike anything else it has on the planet.

So to create, as the president was saying when he came here, a special office which the U.S. State Department used to have, that just deals with the three Freely Associated States, which is Palau, Marshall Islands, Federated States of Micronesia – this corridor of freedom that goes from Hawaii to the Philippines and makes the first island and second island chain viable, and including Guam, Marianas, and the bases in Korea and Japan, they need to be treated separately. Then you can take a look at the rest of the Pacific and work with other allies and partners. But those three Freely Associated States have trusted their lives, literally, to the U.S. and they deserve the respect and the understanding necessary to make that trust be something that can be grown into security for all concerned.

MAY:                           Fascinating part of the world. I’m very glad that you’re studying it, writing about it, advising on it, and I’m glad you’re doing it for FDD. Thanks for this conversation, Cleo Paskal. Thanks, Jonathan Schanzer, as always. And thanks all of you who’ve been with us for this conversation here today on Foreign Podicy.

Thank you for listening to this episode of Foreign Podicy. If you enjoyed the show, please rate us preferably with five stars. Ratings and reviews help give us visibility and the opportunity to reach more people who seek to understand the most critical national security and foreign policy issues. Also, make sure to subscribe so you never miss an episode. Follow FDD on social media and visit our website at fdd.org. There you can find research by FDD experts. You can subscribe to all FDD’S products. You can catch up on any past episodes you may have missed. Finally, we’d love your feedback, your ideas, your questions, your criticisms. Send us an email at [email protected]. Until next time, I’m Cliff May and you’ve been listening to Foreign Podicy.


China India Indo-Pacific Military and Political Power U.S. Defense Policy and Strategy