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U.S. funding to the Freely Associated States is key to strengthening engagement and preventing Chinese influence

• The termination of grant-based economic assistance to the Freely Associated States could have a large impact on Chinese influence.
• The Compacts of Free Association are a powerful tool that deny influence by actors other than the United States in Oceania.
• The Pacific region is viewed by Chinese policymakers as a logical next step for the country's Belt and Road Initiative.
• The conflict between Taiwan and China is played out at a micro level in the Freely Associated States, where two out of three countries recognize Taiwan.
• The expiration of current funding streams from the United States to the Freely Associated States should serve as a catalyst for the opening of a productive new chapter in how the United States and its allies and partners engage with these countries.

The Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau, which make up the Freely Associated States — as well as the broader region of Oceania — have been the subject of increasing Chinese influence and expressions of both hard and soft power. The authors of this report examine the implications of these activities for the United States, particularly in terms of its defense and foreign policy interests. They also look at the actions of other regional and international powers in the Freely Associated States, and examine how those actions complement U.S. leadership.

• Chapter One

  Introduction

• Chapter Two

  The Freely Associated States and Compacts of Free Association

• Chapter Three

  China's Interests and Influence in Oceania and the Freely Associated States

• Chapter Four

  Activities and Responses of Other Countries in Oceania and the Freely Associated States

• Chapter Five

  Implications