The great-power struggle between China and the West now runs through a scattering of small island nations most Europeans know only from postcards. But the Pacific states have made a discovery that is reshaping the contest: the more the giants compete for them, the more power they have to refuse to choose.

For most Europeans, Palau is the kind of country that appears on postcards rather than strategic maps, a scattering of tropical islands in the western Pacific with a population smaller than many European towns, better known for turquoise lagoons and coral reefs than for great-power confrontation.

Yet in September, Palau briefly became one of the most revealing places in world politics. When Pacific leaders gathered there for the 2026 Pacific Islands Forum, China was furious about the presence of Taiwan’s foreign minister and warned of unspecified “consequences,” while Australia and New Zealand insisted that Pacific countries, not Beijing, would decide who attended their own meetings. At the same summit, governments struggled to agree how forcefully to condemn a Chinese intercontinental ballistic missile test fired into the Pacific two months earlier. Palau and Australia wanted a strong response; Nauru refused to endorse it; Kiribati was absent from the decisive retreat. The final communiqué expressed concern and demanded transparency, but stopped short of the condemnation some had wanted.

Meanwhile, a few hundred kilometres away, the United States and New Zealand announced they would spend around 60 million dollars upgrading a Second World War-era port in the Cook Islands. The port has obvious civilian uses. It also sits in one of the most strategically contested oceans on earth. This is what the new competition in the Pacific looks like, and it rarely arrives with aircraft carriers first. It arrives as a port, a telecommunications tower, a police-training programme, a hospital, an airport runway, a climate-finance package, a fisheries agreement, or a visiting minister carrying a very large cheque. The Pacific has become one of the principal arenas in the strategic rivalry between China and the United States and its allies. But there is a problem with describing it that way, because that description treats the Pacific as merely a place where other countries compete. The island nations themselves are increasingly determined not to allow that.

Why does this ocean suddenly matter so much? Look at a conventional map and the Pacific Island states appear tiny. Look at an ocean map and they become enormous, controlling vast exclusive economic zones that stretch across strategically vital sea lanes, fisheries, seabed resources and the routes connecting Asia to Australia and the Americas. Their geography also sits astride the military architecture of the Indo-Pacific.

To the north, the Federated States of Micronesia, the Marshall Islands and Palau maintain Compacts of Free Association with the United States, under which Washington takes on significant defence responsibilities in exchange for strategic military access, and in 2024 approved a further 7.1 billion dollars in assistance to the three states over twenty years. Farther south, Australia has been tightening its own network, agreeing a mutual defence treaty with Papua New Guinea in 2025 on top of PNG’s separate defence deal with the United States. The logic is not hard to follow: a hostile military presence anywhere in these islands could complicate the movement of American and Australian forces, threaten communications and supply routes, and alter the strategic environment around Taiwan and the western Pacific.

China-USA rivalry in the Indo-Pacific Region.

That possibility turned from theoretical to urgent in 2022, when Solomon Islands signed a security agreement with China whose terms were never fully made public, fuelling fears in Canberra and Washington that it might one day permit Chinese military access. Both Beijing and Honiara denied any base was planned, but the agreement changed the strategic psychology of the region: suddenly, small diplomatic decisions by small island governments could generate anxiety in capitals thousands of kilometres away. Solomon Islands may now be recalibrating, with its new prime minister, Matthew Wale, announcing in June that his government would review the Chinese agreement while negotiating a broader treaty with Australia. That does not mean the Pacific is choosing the West. It means Pacific governments have discovered just how much leverage strategic competition hands them.

It was China that altered the balance, though it did not create Pacific geopolitics. Australia, New Zealand, France, Britain, Japan and the United States have shaped the region for generations through colonial rule, military presence, migration, aid and trade. But over two decades Beijing financed roads, government buildings and telecommunications across the region while dramatically expanding its diplomatic footprint, spending roughly 5 billion dollars in official development finance since 2008 and committing around 7.5 billion, with Papua New Guinea alone receiving about 2.3 billion. The familiar Western image of China burying island states under vast infrastructure loans is now outdated, however. Beijing has shifted tactics, with lending falling from its peak while grants and smaller, highly visible community-level projects have grown more important, a sign that it has learned from earlier criticism of its Belt and Road financing and become more sophisticated in how it competes.

And here lies one of the most striking facts in the whole story: China is not the largest donor to the Pacific. Australia is, by a wide margin. Over the past fifteen years Australia has accounted for roughly 38% of total aid to Pacific Island countries, against around 9% for China, with cumulative spending exceeding 23 billion dollars. Yet an extraordinary perception gap has opened. In the Lowy Institute’s 2026 poll, 39% of Australians named China as the most influential country in the Pacific, against just 33% who named Australia. Money and influence, it turns out, are not the same thing, and that realisation is precisely why Canberra, Washington and Wellington are now competing so much more aggressively.

The rivalry is visibly reshaping development itself, because ports are no longer just ports and airfields no longer just airfields. Every piece of strategically useful infrastructure is now viewed through a geopolitical lens. In 2008, infrastructure made up only around 15% of the development finance flowing into the region; by 2019 that had doubled to more than 30%, with ports, airports, power and telecommunications drawing particular attention.

Australia’s response has been dramatic: its share of infrastructure financing commitments rose from around 11% between 2008 and 2018 to roughly 65% between 2019 and 2023. That spending builds things the region genuinely needs, given an estimated annual infrastructure gap of 1.6 billion dollars. But the incentives are unmistakable. A wharf built today for fishing vessels can carry strategic weight tomorrow; an airport upgraded for tourism can also take larger aircraft; a telecommunications network decides whose technology carries sensitive information; an undersea cable is at once economic infrastructure and a security asset. This makes Pacific development more valuable, and also more distorted. Lowy’s research warns that as infrastructure financing has surged, support for areas like education has fallen to near fifteen-year lows. The powers competing for the Pacific are intensely interested in ports. Pacific citizens may sometimes prefer teachers.

Nowhere is the contest sharper than in the strange diplomatic battle over Taiwan. Only three Pacific countries still recognise Taipei rather than Beijing: Palau, Tuvalu and the Marshall Islands. For China, shrinking that number is part of a global campaign to isolate Taiwan; for Taiwan, each remaining ally carries enormous symbolic weight; and for Pacific governments, recognition has become one of the most valuable diplomatic cards they hold. Solomon Islands switched to Beijing in 2019, Kiribati followed, and Nauru switched in 2024, each decision watched intensely because the China-Taiwan struggle transforms a relationship with a small island into a geopolitical signal. Palau has refused to switch, which helps explain Beijing’s sharp reaction to Taiwan’s presence at this month’s Forum. But that objection exposed something deeper: if China can dictate which partners Pacific governments may invite to their own regional meetings, then the struggle is no longer merely over Taiwan. It is over Pacific political autonomy itself.

This is one of the era’s paradoxes. China argues that Western powers should stop treating the Pacific as their backyard; Western governments accuse China of coercion when island states make choices Beijing dislikes; and Pacific governments increasingly tell all of them some version of the same thing. This is our ocean.

This summer the strategic argument became unusually literal. In July, China fired an unarmed intercontinental ballistic missile into the Pacific, alarming governments across the region, several of which said they had received inadequate warning. At the September Forum, Palau and Australia pushed for formal condemnation and did not get it; leaders instead expressed concern and demanded transparency and advance notice for future tests, with Nauru declining to support the criticism and Kiribati absent from the final retreat. The disagreement was revealing in two directions. China now has enough relationships in the region to make a unified Pacific position difficult. But Pacific governments are also more willing than before to criticise great-power conduct when they feel their security is being ignored, and crucially, the final language called on all countries carrying out such tests to provide transparency, not China alone. That distinction matters enormously. Pacific countries do not want Chinese missiles landing unexpectedly in their ocean, and they also do not want their ocean turned into a Western military platform for containing China. They are trying to preserve the space between those two outcomes.

Which is why calling this a new Cold War misses the point. Everyone arrives with a map. China sees island chains, diplomatic recognition and American containment; the United States sees Chinese influence, maritime routes and Taiwan; Australia sees its own security; France sees its Pacific territories; Japan sees its sea lanes; India is more engaged; the European Union is expanding its presence. Pacific leaders keep patiently explaining that they have a map too, and on theirs the central threat is not China. It is climate change.

The Forum’s 2026 Security Outlook again names climate change as the single greatest threat to the region’s security, wellbeing and prosperity. Rising seas, extreme weather, water insecurity and threats to food supplies loom far larger in the region’s own definition of security than the rivalry consuming Washington, Beijing and Canberra. This is the deepest disconnect in Pacific geopolitics. The great powers arrive asking, whose side are you on? Pacific governments answer with a different question. Who will help us remain here? For nations facing coastal erosion, destructive cyclones and saltwater contaminating their freshwater, a strategic partnership is worth something only if it addresses the problems their people actually live with. A patrol boat is useful; so is a hospital. A defence treaty may matter; so does reliable electricity.

This is why Pacific governments so often frustrate Western strategists. Their cooperation with China is read as evidence of Beijing’s advance; their cooperation with Australia or the United States is read as a Western counterattack. In reality many are doing something far more rational: taking offers from everyone. There is a habit in Western commentary of describing these countries as vulnerable to Chinese influence, and economically many are, with small populations, limited government capacity, expensive infrastructure and heavy dependence on foreign finance. But vulnerability is not passivity. Competition has multiplied the bargaining power of Pacific governments. A country of 20,000 people can now host visits from senior Chinese, American, Australian and Taiwanese officials. A port project ignored a decade ago can suddenly attract rival financing. A recognition decision can reverberate through two superpower capitals.

The Cook Islands is the perfect example: its 2025 strategic partnership with China caused a serious rupture with New Zealand despite their unusually close constitutional ties, and a year later Wellington and Washington are helping fund the 60-million-dollar port upgrade on Penrhyn atoll while New Zealand and the Cook Islands have repaired relations through a new security declaration. The lesson to other Pacific capitals is impossible to miss. Strategic attention has value.

But the competition carries real risks alongside the money. It brings pressure too. Pacific states can be dragged into disputes they did not create, their domestic disagreements turned into proxy arguments about China, their infrastructure judged by strategic utility rather than social need, their governments accused of choosing sides when they are merely seeking investment. Regional institutions become harder to manage when outside powers treat every meeting as an opportunity for influence. At this year’s Forum, the analyst Tess Newton Cain described the sheer number of external delegations seeking bilateral meetings as a distraction from the work Pacific leaders were meant to do with one another; every ten minutes spent with an outside partner, she noted, was ten minutes not spent on regional priorities. The Forum has responded by restructuring its system for external partners, placing China, the United States, Japan, France, India, Britain, Germany, the European Union and others in a top tier of “strategic partners.” It is hard to imagine a clearer illustration of how crowded this ocean has become. Everyone wants in.

For most of the post-Cold War era, the Pacific Islands sat at the edge of global affairs. That era is over. The competition surrounding China, Taiwan and the United States is pushing the region toward the centre of Indo-Pacific security. Ports will be built, defence agreements will multiply, aid will grow more strategic, telecommunications will draw more scrutiny, China will keep pursuing influence, Australia and New Zealand will work harder to hold relationships they once took for granted, and the United States will rediscover islands whose importance it understood intimately in the Second World War and then half forgot. And Pacific states will extract what advantage they can from all of it. But the most important question is not whether China or the West will win the Pacific, because that question still assumes the islands are the prize. They are not. They are countries. The more consequential question is whether all this competition leaves Pacific societies wealthier, safer and more resilient, or merely more strategically useful to governments far away.

The Pacific may indeed be becoming a front line. Its people have spent years explaining that they would rather it stayed their home.

By I. Constantin