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China steps up efforts to win Palau but Whipps says he won’t cave in

Tourists aboard a bus in Koror. Photo courtesy of PVA

 By Mar-Vic Cagurangan

Beijing has been dangling lures in a bid to convince Palau to sever ties with Taiwan and switch to China, Surangel Whipps Jr. said.

“That's a constant,” the Palau president said. “The messaging that comes to us is very clear: ‘We have the largest economy or soon to be the largest economy in the world. The sky is the limit with us. You need a million tourists, we can give you a million tourists.”

Whipps said Chinese diplomats and investors have been seeking to curry favor with his administration, proposing to build more hotels and other infrastructure investments in Palau.

Surangel Whipps Jr.

While awaiting the green light, Whipps said China is adamant about its condition for Palau to “denounce Taiwan.”

But the Palauan leader dismisses the proposed term.

“We can't denounce Taiwan,” he said. “We're friends to all.”

Tourism is Palau’s main economic driver. The nation’s economy began to see its decline in 2018 following China’s ban on travel to Palau, which has been declared “an illegal tour destination.”

The move was seen as a punishment for Palau. China was angered by a Palau delegation’s 2017 visit to Taipei, where they met with then-Taiwanese president Tsai Ing-wen and parliament officials to “strengthen their diplomatic relations.”

Whipps said Palau received 100,000 tourists from China in 2016. “But when we didn't switch, they started pulling back the tourists,” he said.

China has canceled Palau’s approved destination status, a designation that allows state-run agents to operate group package tours to approved nations.

The travel ban resulted in the shrinkage of Palau tourism, leading to a 30 percent drop in the economy.


Six years since China's retribution, Palau’s tourism is slowly recovering.

Although China has not reinstated Palau’s approved destination status, Chinese travelers are starting to swarm back to the country.

“They’re our number one tourists again, making up 40 percent of the market,” Whipps said.

However, he said his administration is not keen on relying on the Chinese market alone.

“One of the efforts that I'm working on is trying to diversify our market, by bringing tourists from Australia, Japan and Singapore and to open up new markets,” he said.

“We don't want to be so dependent on one market because if it closes, it causes economic hardship. We welcome visitors. We're friends of all, enemies to none, and we definitely don't want tourism to be weaponized,” he added.

Palau is one of the few remaining countries that recognize Taiwan, whose list of diplomatic allies went to 12 following Nauru’s recent switch to China.

“That’s really their choice,” Whipps said of Nauru’s move. “It does concern us. I think it's important that the 12 remain and it's important for the world to know that (Taiwan) has been a sovereign nation and operating for 80 years.”

Whipps deplored Taiwan’s limited participation in global affairs.

“They're part of the global community when it comes to trade and the economy, but when it comes to health crisis, they're not part of WHO. When it comes to airlines, they're not part of (International Air Transport Association),” he said.

“Their voice is important. They share those democratic values, but most importantly, they respect the rule of law.”


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