A US think tank has said that China is using transnational criminal organizations to advance its political agenda in Palau, which it said could undermine Taiwan’s diplomatic ties with the Western Pacific nation.
Transnational criminal organizations have been investing in Palau, which is one of the tactics China uses to exert influence on the island nation, alongside initiatives in areas such as academia, business and culture, Pacific Economics said in a report.
One of the crime syndicates is the Prince Group (太子集團控股), a Chinese-Cambodian conglomerate founded by Chinese businessman Chen Zhi (陳志), the report said.
Photo: CNA
The group has been implicated in money laundering, online scams and human trafficking, drawing scrutiny from the Chinese government and Radio Free Asia, it said.
The Prince Group has proposed resort investments in Palau of more than US$1 billion, the report said.
Similarly, many recent hotel investments in Palau have ties to China, the think tank added.
Palau should try to identify and prevent harmful business activities, while encouraging positive investments, Pacific Economics said, citing examples such as Taiwan’s investment in the country’s hotels, Australia’s investment in solar power projects and the US’ investments in infrastructure.
While Palau formally recognizes Taiwan and does not adhere to a “one China” policy, criminal organizations can help Beijing fill the gaps in areas where China’s foreign ministry’s efforts might fall short, Pacific Economics cofounder Jarod Baker said on Saturday.
The crime syndicates “are used to covertly bring in money, people and other elements,” he said.
While the People’s Republic of China (PRC) employs various methods to influence other countries, business remains its primary tool for advancing its strategic goals, he said.
The Island Times, a Palauan newspaper, cited the report as warning that the infiltration of criminal enterprises into Palau’s economy could deter legitimate investors, damaging the country’s investment reputation and tourism industry.
PRC-affiliated projects seeking to secure land and infrastructure could also undermine Palau’s sovereignty and disrupt its strategic role in the Pacific, the Island Times quoted the think tank as saying.
In Taipei, the Ministry of Foreign Affairs in a statement yesterday said that the PRC has used Chinese businesspeople and criminal organizations with Chinese backgrounds to infiltrate Palau for many years under the guise of land development and investments.
The ministry said those criminal rings are engaging in money laundering, gambling, fraud and other illicit activities to economically infiltrate and coerce Palau, for which it issued a “stern condemnation.”
In its statement, the ministry contrasted Taiwan’s engagement with Palau against China’s, saying it has worked closely with Palau by encouraging Taiwanese businesses to invest in the Pacific ally, boosting “more prosperous development of Palauan businesses.”
Palauan President Surangel Whipps Jr, who began his second term in January, has been supportive of Taiwan since he first took office in 2021 and has repeatedly accused China of pressuring Palau to switch sides by weaponizing tourism.
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