U.S. and China vie for influence in Palau

China is intensifying its efforts to expand influence in the Pacific Islands, including Palau, as part of a broader geostrategic competition with the United States and its allies. Palau, strategically located in Micronesia, holds close security ties with the U.S. and is seen as critical for monitoring Chinese activities due to its American-controlled airstrips and soon-to-be-completed radar systems. Multiple investigations and intelligence reports indicate that individuals linked to the Chinese government are conducting influence campaigns in Palau, involving predatory investment, elite capture, and illicit activities such as drug smuggling and money laundering. These efforts are viewed as attempts to destabilize local societies and counter U.S. military expansion. The situation in Palau mirrors China’s broader approach throughout the Pacific region, where it uses economic tools, security agreements, and influence operations to challenge traditional Western power. This dynamic is reshaping the Indo-Pacific balance, raising concerns about future regional stability and the potential for direct U.S.-China confrontation.