Corruption opens doors for China's agenda in Palau

Global Watch | 2026-02-23

Allegations of corruption against Palauan Senate President Hokkons Baules highlight China's shadowy effort to expand its influence in the Pacific.

The United States on February 10 barred Baules and his family from entering the US.

"Baules abused his public position by accepting bribes in exchange for providing advocacy and support for government, business, and criminal interests from China," US Department of State spokesman Tommy Pigott said in a statement.

"His actions constituted significant corruption and adversely affected US interests in Palau," he added.

Baules has become a symbol of how corruption can open doors for Beijing's agenda in the region.

Under Baules' leadership, the Palauan Senate has passed resolutions critical of US military activity. Meanwhile, Baules has been one of the island's most vocal advocates for China, despite Palau's official diplomatic ties with Taiwan.

Corporate records have also revealed that Baules' family operates a local business, Fuji Restaurant, which Palauan authorities have linked to Chinese criminal activity.

Corruption playbook

Allegations of corruption and foreign interference are surfacing in strategically critical nations like Palau as China attempts to step up its influence campaigns.

This expansion is part of a broader geopolitical strategy, including China's rapid nuclear buildup, with estimates suggesting Beijing is on track to have over 1,000 nuclear warheads by 2030.

Reuters in April 2025 reported that its investigations found evidence of a concerted influence campaign by individuals with ties to the Chinese government, aimed at preventing the United States from expanding its military infrastructure on Palau.

China is using the same tactics in Palau that it has deployed elsewhere in the Pacific, Joel Ehrendreich, the US ambassador to Palau, told Reuters at the time.

"We've seen the playbook over and over again throughout the region, and it's been very effective," he said.

"Get in with predatory investment, corrupt officials through elite capture, and try to destabilize the society through drug and human trafficking and other crime. And it's easy to do when you go one by one through these little countries that you can overwhelm."

China's approach to the Pacific is clear: exploit economic vulnerabilities to gain influence.

By offering development and economic opportunities, Beijing has sought to woo nations like Palau and the Marshall Islands -- two strategically positioned US-allied Pacific island nations that have official diplomatic ties with Taiwan.

"Corruption is an open door to advance [China’s] agenda, especially in countries that recognize Taiwan and have critical US military bases," said Cleo Paskal, an expert on the Compact of Free Association (COFA) states with the Foundation for Defense of Democracies think tank.

US fights back

China's lurking agenda serves as a stark reminder of the need for vigilance in the Pacific.

Nations like Palau and the Marshall Islands are not just small island states -- they are critical players in the geopolitical balance of power.

Their strategic locations and ties to the international community make them targets for Beijing's influence campaigns.

The barring of Baules from the United States is a significant step in addressing corruption and foreign interference in the Pacific, sending a clear message that actions undermining regional stability and enabling Beijing's agenda will not be tolerated.