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Cao Jiaxuan

The United States is stepping up its presence in the South Pacific with new funding and a reinforced diplomatic footprint, as its competition with China intensifies across the region.
Yet the effectiveness of the push is tempered by Washington’s deep cuts to its main overseas aid agency, leaving doubts about the consistency of US commitment among Pacific leaders, according to analysts.
The Pacific island nations are unlikely to frame their foreign relations as a simple choice between the two. Instead, they are expected to navigate the great power rivalries with a strategic flexibility consistent with their long-held practice of hedging, according to observers.
At the 55th Pacific Islands Forum leaders’ meeting in Palau last week, the US and Australia announced a combined US$580 million package for the region.
Washington’s pledge of US$150 million included US$60 million to help island nations through the energy crisis with expanded fuel storage and stronger power grids. The remainder, from Australia, will mainly be used to combat drug smuggling through greater aerial surveillance and law-enforcement training.

In a parallel move, Washington and Wellington pledged US$50 million and NZ$17.5 million, respectively, to upgrade a former World War II port in the Cook Islands. In response, Beijing said that cooperation should “safeguard regional peace and stability”.
Washington is expanding its diplomatic footprint in a region that has seen Beijing deepening infrastructure and security cooperation in recent years, and where Australia remains the largest traditional donor.
The US reopened its embassy in the Solomon Islands in February 2023, opened another in Tonga later that year and established a mission in Vanuatu in July 2024. It has also been seeking to open a diplomatic headquarters in Kiribati.
Sun Chenghao, a fellow at Tsinghua University’s Centre for International Security and Strategy, said the latest US-Australia package reflected both a response to China’s growing influence and a broader adjustment of Washington’s Pacific strategy.
“The US and Australia are increasingly trying to combine traditional development assistance with security issues,” Sun said.
He also pointed out that the Cook Islands port project with New Zealand underscored “how the US and its allies are using infrastructure to re-establish a strategic foothold in the Pacific”.
But the Washington push comes after the Trump administration slashed USAID’s global budget, leading to a global aid freeze and the cancellation of up to 83 per cent of the agency’s programmes.
The cuts have disrupted health, climate and disaster-preparedness initiatives in the Pacific – areas that island leaders describe as existential threats as sea levels rise and extreme weather intensifies.
“The impact of USAID cuts on US credibility does exist in the short term, and recovery is not simply a matter of adding another sum of money,” Sun said.
“Pacific island countries place a high value on continuity and predictability. If a country’s aid policy fluctuates significantly with a change of government, island nations will naturally reassess its reliability.”

But Pacific island nations have largely resisted framing their relationships with Beijing and Washington as a binary choice. Their governments had instead sought to extract benefits from competing powers while retaining room to manoeuvre, analysts said.
According to Graeme Smith, deputy director of the Coral Bell School of Asia-Pacific Affairs at Australian National University, that strategy is likely to continue.
“While there’s a spectrum of Pacific island countries – with Palau the most pro-US, and Kiribati and Nauru vying to be the most pro-China – all Pacific countries will continue to hedge, as they have always done,” he said.
“It is not in their interests to choose one or the other, as neither the US nor China can provide everything for countries that are the world’s most remote.”
The Solomon Islands example shows how diplomatic alignment in the Pacific is rarely permanent. Honiara signed a security pact with Beijing in 2022, after terminating 36 years of formal relations with Taiwan in 2019. It also later denied a US coastguard vessel a port call.
But Prime Minister Matthew Wale’s government has since sought to rebuild ties with Washington, signing an agreement in July allowing US coastguard vessels to patrol its waters with local police officers on board.
Military developments have also complicated relations with Beijing.
A Chinese nuclear-powered submarine launched a ballistic missile into international waters in the South Pacific in July, prompting criticism from the US, Australia and New Zealand over the lack of transparency and short notice.


At last week’s forum, the leaders expressed concern over the test and called for greater transparency and advance notification of at least 24 hours. But Nauru dissented from the communique, underscoring the difficulty of forging consensus within the group.
According to Smith from the ANU, China’s growing engagement has nevertheless given Beijing greater room to offer a broad model of development, from infrastructure and poverty alleviation to policing and engineering standards.
Tsinghua University’s Sun said that China’s cooperation with Pacific island nations was mainly driven by development needs and the expansion of diplomatic relations, noting the region’s practical demands for infrastructure, healthcare, climate resilience, fisheries and training.
But influence would not ultimately be determined simply by filling a vacuum left by another power, Sun observed.
“It would depend on project quality, debt sustainability, local employment and respect for island states’ autonomy,” he said.


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Washington commits millions of dollars at last week’s regional leaders’ forum in Palau, but experts say it will not be that simple


Washington commits millions of dollars at last week’s regional leaders’ forum in Palau, but experts say it will not be that simple.


US port pledge ups China rivalry in Pacific but island nations stick to own course

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Washington commits millions of dollars at last week’s regional leaders’ forum in Palau, but experts say it will not be that simple

Washington commits millions of dollars at last week’s regional leaders’ forum in Palau, but experts say it will not be that simple