Geopolitical Monitoring Report | September 9, 2022

China | Marshall Islands

Marshall Island’s Plot Highlights China’s Broader Ambitions

Background:

U.S. prosecutors announced charges against two Chinese nationals – Cary Yan and Gina Zhou – for bribing several lawmakers in the Marshall Islands as part of a plot to create a Semi-Autonomous Region (SAR). The couple was arrested in 2020 when visiting Thailand and were just extradited to the United States this week for the scheme, which involved bribing lawmakers in amounts ranging from $7,000 to $22,000 to push for the creation of the SAR. 

The country’s legislature held several votes on the issue from 2018 – 2020 and the debate over the SAR’s creation led to the island’s then-President, Hilda Heine, losing an election in 2019 due to her opposition. Heine stated during her campaign that her opponents were working on China’s behalf and said that the creation of the SAR would result in a “country inside of a country.” 

The Marshall Islands legislature voted to move forward with the creation of the SAR in 2020, but the couple’s arrest in Thailand put a stop to the project. Heine is now calling for an investigation into the incident, which would almost certainly implicate several lawmakers and may reveal the couple was working on behalf of China to expand the country’s influence in the region. 

This incident comes shortly after the Solomon Islands announced they will block foreign military vessels from docking in their ports pending a “review of the process.”  While ships from Australian and New Zealand have since been granted an exemption to the ban, U.S. Navy ships remain barred from visiting the Solomon Islands and the incident highlights the potential future risks to maritime traffic amid China’s continuing efforts to gain influence in the region. 

The Prime Minister of the Solomon Islands – who also agreed to a sweeping security deal with China in April – also recently pushed through a constitutional amendment to delay elections until 2024, a move the opposition describes as a power grab and warned may cause civil unrest. The election delay also raises additional concerns about Beijing’s growing influence in the country.

Impact:

The arrest of Yan and Zhou, coupled with the ongoing battle for influence between the West and China in the Solomon Islands highlights Beijing’s aggressive push for influence among the various island nations in the South Pacific. While China has experienced some significant setbacks – such as Foreign Minister Wang Yi’s failed attempt to encourage nine other Pacific Island nations to sign a similar security pact as the Solomon Islands – the attempt to set up a SAR in the Marshall Islands highlights the variety of ways China attempts to cultivate influence. 

This creates a variety of risks for businesses that operate in the region, because these attempts may result in sanctioned entities gaining significant market share in key industries such as tourism and shipping.  Beijing is also likely to find new opportunities to court island allies in the region following the death of Queen Elizabeth II of the United Kingdom and the debate over the future of the British Commonwealth following the loss of a popular figurehead. 

The countries of  Fiji (membership currently suspended), Kiribati, Malaysia, Nauru, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu are all members of the Commonwealth and could considered ending membership in the body following the ascension of King Charles III as Head of the Commonwealth. China is likely to engage in widespread online propaganda campaigns designed to encourage anti-Commonwealth sentiment in this region to sever these longstanding links to a Western nation and create opportunities for Beijing to fill the void. 

Finally, if China is able to gain significant influence in these regions, it is possible that their actions could cause significant disruptions to maritime traffic in the region, either through military drills, as recently seen off the coast of Taiwan, or through bans on ships traveling through territorial waters. This would provide China with a powerful tool to leverage in the event of a diplomatic row or wider conflict with the United States.

Mitigation:

Companies and organizations must always take care to ensure that they are not engaging with entities or businesses that are either owned by or connected to sanctioned entities. This is especially critical in environments such as this, where multiple powers are vying for influence in a region. 

In addition, the incident also serves as a reminder of the wide reach of the U.S. financial and legal system, which extends to actions in countries not under U.S. jurisdiction. These threats highlight the importance of ensuring that your organization has quality third-party intelligence capabilities that will enable you to investigate individuals and businesses throughout your supply chain to ensure that these types of incidents do not impact your business. 

Disinformation and propaganda campaigns aimed at Commonwealth nations in the region with the goal of pushing their government’s to end their association with the United Kingdom are likely to ramp up and this naturally poses a threat to social media platforms that operate in the countries. Social media should be vigilant of these campaigns and be prepared to take them down to ensure the integrity of their platforms. 

Finally, organizations that rely on commercial shipping in and through the region should continue to actively monitor political developments there, as China’s ongoing attempts to gain influence in the region show no signs of abating.

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