The Asia Pacific region’s geopolitical tensions were on display last week at the convening of the Pacific Islands Forum Leaders Meeting (PIFLM) in Palau.

It has been four decades since the region put its brand on geopolitics when it created a nuclear-free zone. These days, the Pacific as an “American lake” appears to be diminishing in the face of the rise of China as an economic, military and diplomatic player in the region. The U.S. and its English-speaking allies in the Pacific are making a concerted effort to hang on to the glory days of hegemony by presenting island states with an “us vs. them” choice. China, on the other hand, is expanding its influence and creating opportunities to undercut the established order of the U.S.-dominated region. This is a geopolitical game that puts island interests secondary (at best) to the interests of the powers attempting to exert influence. The outcome of the PIFLM suggests the trajectory of great power militarism in the region is ascendant and Pacific Island unity and influence are declining.

As dominant players of the region, the U.S. and Australia are at a structural disadvantage. By default, they “lose” when islands do not choose. As islands open their doors to others, a bit of their influence wanes.  After 80 years of going relatively unchallenged and having operated under the premise of containing China, to now compete in the region is difficult for the old dominant players to get their heads around. So far, the U.S. and Australia (and to a smaller extent, New Zealand) are arguably clinging to their views of containment. China does not have to do much to chip away at the artifice of a dominion in the Pacific, which has been colonized, underdeveloped, and militarized by the traditional powers. It should be said, however, that China does not come into the region as a benevolent power and should not be viewed as such. Overall, Pacific unity is under a geopolitical full press that is increasingly dividing the region.

The 2026 Pacific Islands Forum

There are a multitude of issues that created rifts leading up to the PIFLM. These contributed to a third of member states not sending their chief executives to Palau for the summit. But beneath the posturing are more profound issues that are driven by a longer view of geopolitical positioning in the region.

If there are two issues that defined the tensions at PIFLM in Palau, they are (1) the Chinese submarine-launched ballistic missile test in July and (2) the role of Taiwan in Palau. Both issues create opportunistic openings for China.  Neither of these should have surprised careful observers. How they have been managed, however, has impacted the PIFLM and will reverberate into the future. How countries like the U.S. and China are positioning themselves in other areas will deepen the direction of the coming changes.

The July 7 launch of a submarine-based ballistic missile by China – its first since 1982 – arced across the region, landing south of Naoero (Nauru). This action, even though several governments in the region were reportedly informed in advance, was disappointing and alarming to most Pacific island states. Even nations who maintain the strongest relationships with China rightfully expressed their displeasure with the test.

A proposed PIF response to the Chinese test was led at the PIF Foreign Ministers Meeting by Australia and New Zealand and given additional voice by Taiwan and its island state allies Tuvalu, Palau, and the Marshall Islands. The approach, however, was critical of only Chinese missile tests in the Pacific. As the Chinese noted, it ignored that other countries conduct missile tests in the Pacific and that the region should “not be misled by countries and media that hold prejudices against China.”

Opposition to the proposal criticizing China was reportedly led by those closest to them in the region. This would hardly be surprising. But it is also clear that sentiment against the China-focused proposal ran deeper. Other Pacific Island states essentially agreed with China’s view. As the president of French Polynesia noted, “We’ve had our share of ICBM tests in the last years. … I don’t see any reason why we should single out the tests made by the Chinese without referring to those regularly made by the Americans.” His sentiment was shared openly by other leaders, including Papua New Guinea and the Solomon Islands. Still, Australia and others openly announced they wanted the China criticism revived when PIF leaders met in Palau.

At the core of this issue is the conflict between those seeking to criticize China and the ability of China to easily expose a double standard that others would rather ignore. Even though both China and the U.S. conduct ballistic missile tests in the Pacific, the expectation that island states will simply ignore U.S. tests creates disunity among Pacific states. This disunity is less favorable for the U.S. than China, since the U.S. has traditionally benefited from Pacific unity and/or acquiescence. As the U.S. (and by extension Australia and New Zealand) loses the ability to readily shape the Pacific agenda, China incrementally gains from the disunity.

The question of Taiwan is an even less surprising issue where China finds leverage within the PIF. Most PIF members recognize China and not Taiwan. Since China views Taiwan as part of China and not a separate political entity, privileges extended to Taiwan are a diplomatic redline that China is increasingly rigid on globally. However, Taiwan was highlighted at the PIFLM given Palau’s strong support for Taiwan (and criticism of China). As the meeting host, Palau went beyond the usual recognition that Taiwan receives as a “development partner” within the organization. This elevated treatment of Taiwan is also not surprising given Palau’s clear position, nor is China’s reaction that there would be “consequences” over Taiwan’s participation at the PIFLM. While China may employ retribution directly on Palau, it should also be expected that differences between island states on the issue of Taiwan will put increasing strains on unity within the PIF.

The fact that some  island leaders are not in attendance at the PIFLM in Palau has already raised questions and suspicions about China’s possible role. But the apparent divisiveness of the Palau PIF of 2026 may be a tiff compared to the underlying trends. These large and larger countries’ interests are different from the island states. As such, island states may be the biggest losers.

Whose interests?

In addition to the rise of China, the megatrend is that the U.S. is straining to demonstrate an ability to manage the increasing competition with another power that is encroaching on its eight decades of hegemony.

The notion that rational actors would line up to express outrage at only one country that is conducting missile tests in the Pacific clearly illustrates weaknesses in operating under fading hegemonic assumptions. Australia’s Prime Minister at the PIF, with a gleam in his eye, stuck to his country’s missile preferences when he said the Chinese missile test was “not the act of a friend.”  Such characterizations are not just overreaching; they are also self-defeating. China clearly gets this and is using it successfully to undermine U.S. (and allies) credibility.

In the end, the PIFLM decision on missile testing was neither a Pacific Way consensus nor a condemnation of China. Rather, the communique “registered concern on the recent intercontinental ballistic missile (ICBM) test” (emphasis in original) and called for all countries conducting tests in the future to issue notices 24 hours in advance. A dissent by Nauru and an abstention by Kiribati were hardly surprising. This PIF action, however, ultimately undercuts its traditional consensus decision-making process and assumes more missile tests in the future.  

The challenge the U.S. has  moving into the future was made clear in the U.S. head of delegation to the PIFLM’s opinion editorial entitled “Setting the Record Straight: The U.S. Commitment to the Pacific.” The U.S. representative apparently felt it necessary to declare that “The United States is a Pacific nation” while identifying WWII battlefields and the “recent submarine-launched ballistic missile tests in the region.”  These credentials and criticism were displayed alongside the call for a “reexamination of our defense and security ties with the Pacific Islands.”  Almost simultaneously, the U.S. president underscored the hegemon’s perspective with an online post declaring the Federated States of Micronesia and the Republic of the Marshall Islands as U.S. territories (along with his declaration that the Strait of Hormuz was now in the U.S. orbit). Claims of extra-territorial dominion and the inherent expectation of unilateral control hardly seem a way forward for the U.S., not to mention handing adversaries a propaganda gift.

There are, of course, real questions about sustained U.S. commitment to the region as more than a military power. Two U.S. administration pivots to Asia have failed to get traction. Meetings like PIF often produce headlines that fail to produce results for the region because executive branch commitments lack congressionally funded resources. Even on the military front, while the buildup of new military facilities in the region is in the works, the foundational bases in the region in Guam are being allocated barely half of the funds needed to maintain the installations. When there was no competition, the U.S. maintained its regional role on the cheap. Those days are over, and it is not clear how much Americans are ready to commit to the islands.  This gap is obvious in the U.S. requests and expectation that Australia and others will “step up” and pick up the slack.  

In view of the competition, a more responsible path for the U.S. might focus on building Pacific Island capacity without assuming or forcing choices. A national policy that is pro Pacific Islands and not just anti-China is essential if the U.S. is to move beyond “containment” and to competition. Promoting island governance that strengthens Pacific sovereignty is foundational.  Prioritizing and funding regional fora (like the PIF, the Forum Fisheries Agency, SPREP, Pacific Community) would serve to depoliticize the region’s development and environmental needs. As a function of policy, durable frameworks for U.S. interaction with Pacific nations should be codified with high-level engagement and financial access that is electorally neutral. These would be significant changes for the U.S. Today it is not clear that there is an appetite for recognizing the region as something more than an appendage of U.S. military projection and strategic denial.

For the islands, the challenge is equally daunting. Chinese advances into the region are in their early stages. Like the U.S. and Australia, China too has been seen to overplay its hand. Still, it is clear the post-WWII U.S. containment bubble is not sustainable. Today and into the future, island states will likely have to navigate not just U.S. (and some allies’) assumptions of regional dominance but also Chinese pressures and the attendant redline on the status of Taiwan.

If the current trend continues, the U.S. (and Australia and New Zealand), China, and Taiwan all assume the Pacific is an arena to be mined for their own respective geopolitical interests. Island interests, at best, are regarded as secondary. If Pacific unity is to again be ascendant and it is to influence geopolitics with its own stamp, it will have to return to the Pacific focus that defined earlier periods of regional success.

The Pacific Center for Island Security (PCIS) is a Guam-based, nongovernmental, nonprofit organization and research institute that anchors an island and islander perspective among geopolitical posturing and in regional security issues. Its advisory council includes former presidents of the Federated States of Micronesia, the Republic of the Marshall Islands, the Republic of Kiribati, and the Republic of Palau. For regular updates, PCIS is on Twitter @PCIS_Guam.