Island Nation Balances Superpower Influence
In the middle of the vast Pacific Ocean lies Palau, a small island nation with fewer than 20,000 people — but lately, it’s caught the attention of two global superpowers: the United States and China.
Palau, long aligned with Washington through a Compact of Free Association, allows the U.S. to operate military installations on its territory. As tensions rise in the Indo-Pacific, the U.S. is expanding its military footprint in Palau with new radar systems and runway upgrades aimed at deterring Chinese influence in the region.
But China hasn’t backed off. It’s seeking soft-power leverage through tourism, fishing rights, and diplomatic efforts to sway island leaders. Although Palau officially recognizes Taiwan — a sore point for Beijing — economic pressure and subtle influence campaigns have tested the nation’s resilience.
For the U.S., investing in Palau isn’t just about military strategy; it’s about preserving access to key sea lanes and countering China’s island-hopping diplomacy. For Palau, however, balancing relations with both powers while protecting its sovereignty, environment, and economy has become increasingly complex.
As the global rivalry plays out on this small island, Palau’s position grows more strategic — and its choices more difficult.