FSM preparing for diplomatic switch to Taiwan amid China’s protest


Federated States of Micronesia (FSM) will be much better off without China, outgoing President David Panuelo said, disclosing the initial steps he has taken toward a diplomatic switch to Taiwan, a move protested by Beijing.

In an extensive letter to the FSM Congress that came out of the blue, Panuelo expressed his displeasure over China’s attempted use of the FSM borders to promote its political warfare while preparing to invade Taiwan.
David Panuelo

“If an invasion of Taiwan seems unlikely, did we not feel the same about the invasion of Ukraine? And in this case, we know about (the People’s Republic of China’s) whitepaper to be ready to invade by 2027,” Panuelo wrote.

“If I am to make the argument that our country is the target of political warfare so as to prepare our country and region to align ourselves with China prior to their invasion of Taiwan, I must also make the argument that our country can obtain a better deal without China” he added.

Panuelo’s China-bashing letter came as a complete surprise given his previously repeated reference to the FSM’s “great friendship” with China, which hooked the Micronesian nation with its Belt and Road Initiative.

The FSM, one of the few Pacific nations that have diplomatic relations with Beijing, is freely associated with the U.S by virtue of the Compact of Free Association.

Its relations with the two competing superpowers involved a balancing act that stood on the FSM’s “friend to all, enemy to none” foreign policy.

But the FSM begins to feel the squeeze.

“China is seeking to ensure that, in the event of a war in our Blue Pacific Continent between themselves and Taiwan, the FSM is, at best, aligned with China instead of the United States, and, at worst, that the FSM chooses to ‘abstain’ altogether,” Panuelo said.

Rejecting China’s pressure, Panuelo turned to Taiwan.

Panuelo said he met with Taiwan Foreign Minister Joseph Wu in February to solicit potential assistance to offset what it would lose should the FSM eventually sever ties with Beijing and turn off the flow of Chinese money.

“I was transparent with Foreign Minister Wu; we project we need an injection of approximately US$50 million to meet our future needs,” Panuelo said in a letter to the FSM Congress. “We can and will receive this, over a three-year period, if and when we establish diplomatic relations with Taiwan.”

Panuelo said Taiwan has offered to pick up all projects that China is currently undertaking, such as the construction of the National Convention Center in Palikir, the government complexes in Kosrae and Pohnpei and fitness facilities in Satowan and Udot.

“Taiwan will finish them, using Micronesian labour and Micronesian businesses, unlike China, inclusive of job training for our labourers,” Panuelo said.

“We can play an essential role in preventing a war in our region; we can save the lives of our own Micronesian citizens; we can strengthen our sovereignty and independence; and we can do it while having our country at large benefit financially,” he added.

“All of this assistance, of course, would be on top of the greatly added layers of security and protection that come with our country distancing itself from the PRC, which has demonstrated a keen capability to undermine our sovereignty, reject our values, and use our elected and senior officials for their own purposes,” Panuelo said.

Initial discussions with Taiwan focused on establishing a Taipei Economic & Cultural Representative Office in the FSM.

“This March I’ve invited a team from the Taiwan International Development Cooperation Fund to conduct a technical mission in the FSM to determine, among other matters, how Taiwan can assist with agricultural programs, such as tackling food security issues and establishing a food co-op,” Panuelo said.

“We are exploring a memorandum of understanding between Taiwan and the FSM as it relates to medical referrals, wherein our citizens can receive a higher quality of care than other jurisdictions and for less cost,” he added.

China protested the FSM’s communications with Taiwan, saying it breaches the one-China principle.

“We are shocked by the news about the negative remarks concerning China in the letter which are a clear misrepresentation of facts and full of slanders against China-FSM friendship,” the Chinese Embassy said in a statement.

“The letter revealed that some FSM individual politician breaks the serious political commitments which he made to China multiple times, makes official contact with Taiwan authorities and seeks official relations with Taiwan region, which seriously violates the one-China principle,” the Chinese Embassy said.

“China firmly rejects any official communications between the FSM and Taiwan region in any form and firmly opposes any slanders against Chinese diplomatic and commercial activities”.