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Washington Post
23 minutes ago
- Washington Post
The U.S. military is investing in this Pacific island. So is China.
KOROR, Palau — The U.S. military will next year upgrade Palau's main harbor, usually frequented by dive boats full of tourists heading to emerald lagoons, so that American warships can enter the Pacific island nation's narrow channels and dock here. The wharf will be expanded and elevated. There will be a new logistics hub with a warehouse, enabling U.S. Navy ships to refuel, reload and rearm. This is all part of a broader effort to boost the U.S. military's presence in the Western Pacific, allowing for the rapid mobilization of American forces in the event of a conflict involving China. Complicating that plan, however, is a Chinese-owned hotel overlooking Malakal Harbor that U.S. and Palauan officials worry could be used for surveillance. Across Palau, Chinese businesses and developers have leased land near a half-dozen strategic locations where the United States is beefing up efforts to detect and deter China's growing reach into the region, according to intelligence and security documents and interviews with 20 American, Palauan and Taiwanese officials. A months-long Washington Post investigation found that Chinese businesses have leased land or built properties for tourism developments near the port, the airport, a U.S. coastal surveillance outpost and a U.S. 'over the horizon' radar system. (Palauan law doesn't allow foreigners to buy land, but they can lease it for up to 99 years.) These Chinese leases or buildings potentially provide Beijing with not only a bird's-eye view of the increasing American footprint in Palau but also opportunities to disrupt U.S. military activities here, the officials said. Some of the projects have connections to groups allegedly linked to organized crime, according to records obtained by The Post including a U.S. intelligence assessment and parts of a Palauan national security briefing, and officials in both countries are concerned these groups could act as proxies for Beijing, complementing the expansionary goals of the Chinese Communist Party (CCP). 'The Chinese are very sophisticated,' Palau's president, Surangel Whipps Jr., said in an interview. 'They play the long game. They know exactly what they're doing and so we've got to be smarter.' China, which has the world's largest navy, has been aggressively increasing its influence across the South China Sea and into the Western Pacific, seeking to becoming the predominant maritime power in a region the U.S. has long considered its domain. The location of Palau, a Micronesian archipelago of more than 300 islands east of the Philippines, has long made it strategically valuable. Japan occupied it during the first half of the 20th century, then fought bloody battles with the U.S. here during World War II. Today, Palau is an important link in the Second Island Chain, the string of outposts stretching from Japan through Guam and Micronesia to Indonesia that the U.S. is fortifying to constrain China's expansion. (The First Island Chain includes Taiwan and is closer to China.) The U.S. military, which has broad access in Palau as part of a compact of free association, sees the island nation as a small but key piece of its strategy to quickly disperse forces and project power in the region. Chinese leader Xi Jinping has vowed to take control of Taiwan — by force if necessary — potentially involving the U.S. in a military conflict. In the meantime, Beijing has convinced several countries in the region to sever diplomatic ties with the self-governing democracy that China claims as a province. Palau is one of only three Pacific nations that still recognize Taipei over Beijing. Whipps said that soon after he was first elected in 2020, he received a call from China's ambassador to the Federated States of Micronesia, who offered a 'million' tourists a year to fill Chinese-built hotels — in exchange for Palau's abandoning Taiwan. China's Foreign Ministry did not respond to requests for comment. 'This is a national security issue not only for Palau but also Taiwan and the United States,' said Jessica C. Lee, Taiwan's ambassador to Palau. 'If there is a 'D-Day,' the Chinese will be able to cut cables in Palau, activate devices on rooftops, whatever they can to delay a U.S. response to Chinese aggression.' Beijing has studied U.S. force projection closely and knows that facilities in places like Palau are critical to American readiness, said Abraham Denmark, who was a defense official in the Biden and Obama administrations. 'It's very clear they want to do what they can to disrupt U.S. operations as best they can using whatever means they have available.' Officials say this country of just 17,000 people has seen a surge in violence, drugs and corruption involving Chinese nationals that Whipps claims is designed to pressure Palau to recognize China, something Beijing denies. Whipps has cracked down on foreign, and especially Chinese, influence in Palau. Since his reelection in November, his administration has deported dozens of people, denied more than 150 tourist visas or work permits, and added more than 100 names to its list of undesirable aliens. In all three categories, the majority of people have been Chinese, including some with land leases near strategic sites, records show. Joel Ehrendreich, the U.S. ambassador to Palau, said the pattern of overpriced land leases in strategic but often economically unviable locations fits with Beijing's modus operandi. 'Leasing land is certainly the right of the landowner under Palauan law,' Ehrendreich said. 'But you've got to wonder when you see where the Chinese are doing it, the prices that they're doing it and what they do with the land after they lease it. It just raises a lot of questions, a lot of suspicion.' A document obtained by The Post shows that the U.S. Embassy has asked the Trump administration for more assistance, including a senior U.S. law enforcement official with experience in combating Chinese organized crime and a Drug Enforcement Administration agent to tackle trafficking and corruption, plus a rotation of five U.S. police officers and a pair of prosecutors to handle cases involving Chinese suspects. The State Department said that it couldn't comment on embassy requests but that transnational organized crime linked to China was 'evolving' in the region. 'We've seen the CCP deepen its influence to undermine Pacific regional security, damage economies and endanger citizens,' it said in a statement. Analysts say it's unclear what approach the Trump administration will take to the Pacific. The U.S. DOGE Service canceled the final months of a contract for some U.S. security assistance in Palau. Whipps hopes President Donald Trump will restore and bolster ties. 'Don't cut off your partners,' the Palauan president said. 'We're on the front line.' Roughly 40 miles south of Malakal Harbor sits the island of Angaur. It, too, is in the middle of an American military upgrade. It, too, has been the focus of Chinese interest. The U.S. military has spent the past two years and $100 million clearing 100 acres here for a receiver for its Tactical Multi-Mission Over the Horizon Radar, or TACMOR. The system, which requires transmitter and receiver stations at least 50 miles apart, will enable the U.S. to detect Chinese hypersonic missiles or airplanes that might target U.S. forces in the Second Island Chain to prevent them from aiding Taiwan. In 2010, Palau's government publicly urged the U.S., which was relocating Marines from the southern Japanese island of Okinawa, to move them to Angaur. Soon after, Chinese investors started expressing interest in the remote island. Land records show that in 2014, Tian Hang, a longtime Chinese resident in Palau known here as Hunter Tian, signed contracts with four family groups to lease about 250 acres of land, including near Angaur's airstrip and port, for what he said would be a resort. Tian, who declined interview requests, is the president of the Palau Overseas Chinese Federation, which functions as part of the CCP's United Front Work Department promoting state objectives and whose members have given illegal campaign contributions to pro-China politicians in Palau, according to the U.S. intelligence assessment, parts of which were first reported by Reuters. None has been charged. The U.S. and Palau announced the plan for the TACMOR system in mid-2017. A few months later, Tian took prominent Palauans to China to meet with officials, according to the U.S. intelligence assessment and former president Johnson Toribiong, who went on the trip. Tian also launched a China-Palau trade organization and an ill-fated media organization in Palau with ties to Chinese security services, according to the Organized Crime and Corruption Reporting Project. In 2018, Tian's deputy in the federation introduced Palau's then president, Tommy Remengesau Jr., to Wan Kuok Koi, a Macao mob boss known as 'Broken Tooth' who served 14 years in prison in Macao for illegal gambling, loan-sharking and attempted murder. Remengesau told The Post he wasn't aware of Wan's background. But it became clear in 2019 when Wan boasted in Hong Kong media of his plans for a Palau casino resort — located in Angaur, it was later revealed — where he would control 'customs, ports and an airport.' Remengesau responded by banning foreigners with criminal histories from coming to Palau. The U.S. Treasury later imposed sanctions on Wan. Previously unreported, however, is the fact that Wan was also interested in leasing land next to a second TACMOR site, a transmitter 60 miles north of Angaur in Palau's Ngaraard state. Alan Seid, a prominent Palau businessman, told The Post that he signed a memorandum of understanding to lease to Wan a plot of land across the road from the Ngaraard transmitter site. Wan promised to pay as much as $15 million but never delivered, according to Seid, who declined to provide a copy of the MOU and said he, too, was unaware of Wan's background. Wan could not be reached for comment. Whipps said it was 'suspect' that Wan, who had been honored by Beijing for his patriotism, had explored leasing land near both TACMOR locations. 'When you begin to see the connections, then you begin to wonder how can the Chinese government say they're not working with organized crime,' the president said. Experts say Beijing selectively uses organized crime groups to further its objectives overseas — something the Chinese government has denied. 'It works for Beijing in two ways,' said Euan Graham, a senior analyst at the Australian Strategic Policy Institute, a Canberra-based think tank. 'They can export their criminal problem, but then they also turn that criminal problem into their front line of influence, basically just to sow corruption and to erode governance in these small island states.' Tian's Angaur leases have expired, and Wan's plan for both TACMOR sites ended when he had to leave the country. But the transmitter site in Ngaraard state, where work awaits an environmental permit, could soon be overlooked by a 275-room Chinese resort. Tian Shuchun (no relation to Hunter Tian) leased 60 acres here in 2015, two years before the TACMOR announcement. But it wasn't until late 2023, shortly after the U.S. military held its first public meetings on the radar, that he registered plans to build the Palau International Grand Hotel, according to local tax records. His company, Great Wall Garments, a women's clothing manufacturer in Tianjin, near Beijing, has branched out into 'high-end hotel resorts' in China, Vietnam, Uzbekistan and Palau, according to its website. Tian, who declined interview requests, has been a member of the CCP for 46 years and has been awarded several honors, including 'Outstanding Communist Party Member of Tianjin,' according to the Tianjin Small and Medium Enterprises Association, where Tian serves as a deputy director. The association has close ties with the Chinese People's Political Consultative Conference, a key part of China's United Front Work. Tian joined the People's Liberation Army at age 19. When his company hosted an event for PLA veterans in 2022 to promote patriotism and loyalty to the CCP, he told the gathering that he still practiced many PLA habits including 'a hard work ethic,' according to a local government press release. U.S. and Palau officials also worry about Tian's local ties. In January, Palauan authorities busted what they said was a Chinese-language online gambling and scam operation in a hotel owned by the family of Vance Polycarp, the local agent for Tian's hotel project. A dozen people, including eight of Polycarp's employees, were detained, according to court records. Polycarp, who was charged with four misdemeanor labor violations, told The Post that he'd done nothing wrong and that the government was 'overreaching.' In October, six U.S. C-17 transport planes swept down on Palau's Roman Tmetuchl International Airport, part of an exercise simulating scenarios the U.S. could face in Palau in a conflict with China. Hundreds of Army Rangers practiced rapidly securing the airfield before an artillery brigade launched six missiles from High Mobility Artillery Rocket Systems (HIMARS), all while an electromagnetic warfare squadron provided secure communications. A mile from the western end of the runway, a sign in Chinese and English warns the public to stay out. Atop a hill, workers were finishing the foundations of a 50-room hotel called the Ritzy. According to an analysis by Pacific Economics, a Hawaii-based consultancy, the company building the Ritzy — Horizon Holdings Group — has ties to a Chinese-Cambodian conglomerate — Prince Holding Group — that Chinese officials have linked to transnational crime. In a risk assessment prepared for Palauan authorities, Pacific Economics analyzed records from two commercial databases and found ties — including shared directors across two subsidiaries — suggesting that the two companies are associated. Li Yangkun, Horizon Holding's chairman, told The Post that the links stemmed from a partner's selling a company to the Prince Group in 2017. However, commercial data reviewed by The Post shows that Li's partner, Zhou Bo, continued to serve as a director of the company for at least two years after the sale, alongside Prince Group Chairman Chen Zhi. Zhou also served alongside Chen for several years as a director of Prince Bank PLC, a Prince Group subsidiary. Chinese prosecutors have accused Prince Group subsidiaries of luring people to Cambodia to work in online casinos, according to public court records. The CCP's Central Political and Legal Affairs Commission has called the Phnom Penh-based conglomerate a 'massive cross-border online gambling corporation,' with officials estimating illicit revenue of $700 million between 2016 and 2024. In response to The Post's questions, Prince Group spokesman Gabriel Tan acknowledged the past links between Zhou and Chen but said Zhou's involvement with the Prince Group ended in 2019. Records show that is when Horizon Holdings was incorporated, also in Cambodia. Tan said the Prince Group has no ties to the Ritzy or Horizon Holdings and 'no operations, investments, development activities, subsidiaries, or partnerships in Palau.' He said that any court cases mentioning the company were 'cases of impersonation' and that 'no executive or employee' has been prosecuted, convicted or 'formally investigated in China or any other jurisdiction.' The conglomerate has maintained its business in China, including several real estate offices that work with Chinese state-owned companies, and is involved in projects in the Belt and Road Initiative, China's global infrastructure investment program, according to local government press releases. Citing Pacific Economics, Palau's National Security Coordination Office warned in a report that the Ritzy's alleged ties to the Prince Group threatened to introduce 'illegal gambling and other illicit activities.' Whipps's government put three people associated with the Ritzy on the undesirable-alien list in April. The only employee still in Palau, a Chinese project manager named Mu Hongyue, insisted the project wasn't linked to the Prince Group and didn't pose any threat. 'It's ridiculous,' he said in late April as he gave Post reporters a tour of the construction site, including what would eventually be a badminton court. 'How can we use this place to attack your aircraft?' But Bryan Clark, a former U.S. Navy officer and an expert in electronic warfare at the Hudson Institute, a conservative Washington think tank, said a mile would be close enough to launch an unjammable fiber-optic drone or intercept radio communications. 'You just need to find one or two pilots or navigators who aren't on the ball and forget to do the right equipment setup and, boom, you've got an intelligence coup for your country,' he said. The Ritzy isn't the only Chinese development with alleged links to the Prince Group. A project is set to begin in Palau's north near a U.S. coastal surveillance system, a radar with a 75-mile radius. In late 2019, not long after he was in discussions with Wan over the land near the TACMOR site in Ngaraard, Seid was approached about an uninhabited islet he co-owned. He took a group of Chinese businessmen led by a 'Mr. Chen' — who insisted that he wasn't to be photographed, Seid said — to Ngerbelas, where he barbecued freshly speared fish for them. He eventually leased them the island for up to 99 years for $7 million, records show. The Grand Legend International Asset Management Group is now poised to build a luxury resort on Ngerbelas. Palau corporate records show its largest joint shareholder is Chen Zhi, the Chinese-born naturalized Cambodian citizen who heads the Prince Group. A document for the resort filed with the Palauan government and obtained by The Post says that 'Grand Legend is a subsidiary of Prince Real Estate Group.' The website for another Prince Group subsidiary featured a map — now removed — showing a project in Ngerbelas. Tan, the Prince Group spokesman, confirmed Chen's involvement but said that it was only in a 'personal capacity' and that he had not been to Palau. Tan said that Grand Legend was not a subsidiary, that the resort was unrelated to the Prince Group, and that the Prince Group had never positioned developments near U.S. strategic sites in Palau. Above Malakal Harbor in Koror, the upper reaches of the Belmond Hotel are being renovated. Its Chinese owner, Zhang Zhengrong, says it will soon have a rooftop lounge. U.S. and Palauan officials fear it could house electronic surveillance devices aimed at visiting U.S. warships. Zhang scoffed at the idea. 'I'm a simple businessman,' the 35-year-old said in a phone interview. 'I have zero interest in politics. Not in China. Not in Palau.' Zhang said he grew up in China's Fujian province and went into construction after dropping out of school at age 14. He said he went to Palau on vacation in 2019 and liked it so much that he decided to stay and invest. He bought the partly built Belmond for $3 million during the covid-19 pandemic using the proceeds from his construction businesses, he said. According to the Palau national security brief, however, Zhang has ties to the Fujianese mafia — known for its global reach — and his money comes from running online scam operations in Southeast Asia. Zhang denied any involvement in the mafia or scam operations. In December, however, police raided a suspected illegal online gambling and scamming operation in one of his four Palau properties. They arrested one person and several others fled. Zhang said he was merely the landlord. Zhang said he learned of the Belmond from Siegfried Nakamura, a local lawyer whose family owned the hotel. Nakamura was elected to Palau's Senate in November. Nakamura is one of at least three Palauan politicians who allegedly received illegal campaign donations from Zhang, according to the U.S. intelligence assessment. (Foreigners are not allowed to make campaign donations in Palau.) Zhang said that he gave Nakamura $10,000 in cash but that it was for legal services. Nakamura also denied the accusation, which he called 'unfounded, defamatory and false.' It's unclear whether authorities investigated. Neither Nakamura nor Zhang was charged. Zhang's alleged illegal activity, plus the hotel's proximity to the port, gives U.S., Palauan and Taiwanese officials cause for concern. Analysts say the biggest risk is electronic surveillance. That could be monitoring U.S. Navy communications or taking acoustic signatures from U.S. ships that can be used for torpedo targeting, said Clark, of the Hudson Institute. If satellites were disabled — something many military analysts say would be likely in a conflict between the U.S. and China — the hotel could be used to target the port. 'What China does is what we do,' said Clark, 'which is to try to create a bunch of options for later.' Palau is trying to chip away at China's options. In April, Zhang flew from Hong Kong to Koror but was sent back after finding out he'd been added to Palau's rapidly growing list of undesirable aliens. Zhang — speaking, he said, from Thailand — insisted he had zero ties to Beijing, which he said wouldn't need him anyway. 'In a small country like Palau, if China wants to do surveillance, they can do it from anywhere easily,' he said. 'They don't need a hotel with a good location.' Photo editing by Jennifer Samuel. Graphics by Adrián Blanco Ramos. Text editing by Anna Fifield and Peter Finn. Copy editing by Martha Murdock.
Fox News
23 minutes ago
- Fox News
LIZ PEEK: Trump's major trade wins could be rocket fuel to US economy
Hats off to President Donald Trump, who is singlehandedly reordering global trade, in the face of enormous opposition. The president took office pledging to make trade fair again for Americans, and he is well on his way to achieving exactly that. While the initial roll-out of his tariff program in April was clumsy, the subsequent negotiation of trade deals has been masterful. Much remains to be fully fleshed out for agreements concluded in weeks as opposed to the more customary years, but the essential ingredients are straightforward. The president and his team are working to lower the barriers to U.S. exports erected by countries around the world and, where our trading partners refuse to make concessions, charging them for access to our markets. Here's why he can force their hands: The United States is the world's biggest economy, at $29 trillion; China and the EU come next, at roughly $19 trillion. The U.S. leads in sheer size and also in the magnitude of our consumer market, at about 70% of GDP, or $20 trillion. By comparison, the Chinese consumer accounts for only some 40% of that country's GDP, or less than $8 trillion. About 52% of the EU economy comes from consumer spending, or less than $10 trillion. Every country on Earth wants to export to the U.S. Consequently, our country has clout, and the president is determined to use it. He is removing tariffs that other countries have imposed on American-made goods coming into their countries and also fighting non-tariff barriers, such as illegal government subsidies, currency manipulation and arcane regulations set up by Europe and Japan, for instance, to exclude U.S. agricultural products and other goods. Our farmers are the most productive in the world – they can out-compete anyone, which has inspired tough protectionist measures from some of our trading partners. Historically, countries around the world have not dealt fairly with the U.S. Conservatives dislike Trump's tariff program because they say it interferes with free trade, but the global exchange of goods and services is not free. When Europe charges U.S. carmakers a 10% duty on Chevys sent to Germany, and we only charge 2.5% on Volkswagens coming here, something is off. Over the weekend, President Trump negotiated the grandaddy of all trade deals with the EU, imposing 15% tariffs on Europe's imports and securing commitments that the EU will import sizeable amounts of energy. Success was not assured; the president himself, on the cusp of his talks with European Commission President Ursula von der Leyen, put the chances of concluding a deal at about 50-50. For our relentlessly optimistic president, he was cautious in the extreme, for good reason. Actually, for several good reasons. First, the EU is a fractious group of 27 sovereign nations who, despite acting as a block, have very different economies and interests. Second, EU countries are for the most part run by condescending liberal elites who view Donald Trump as uncouth and annoying, as he persistently disrespects the globalism that bind them together. Third, they bitterly resent the United States, which is running rings around them on everything that matters, like technology and energy. President Trump's caution was also warranted because EU leaders like to score political points back home by standing up to him; it was quite possible that the bloc's leadership would torch a compromise in order to look strong. As it is, the deal was widely panned by European officials and economists, with the ever-obstreperous French leading the way. French Prime Minister François Bayrou furiously denounced the pact, describing it as "submission." French Trade Minister Laurent Saint-Martin said he did not want Paris "to settle with what happened yesterday because that would be accepting that Europe is not an economic power." Here's a newsflash for French politicians nipping at von der Leyen's ankles; Europe isn't much of an economic power. The World Bank reports that from 2008 to 2023, EU GDP grew by 13.5% (from $16.37 trillion to $18.59 trillion) while U.S. GDP rose by 87% (from $14.77 to $27.72 trillion). In addition, EU GDP per capita as a percentage of U.S. GDP per capita fell from 76.5% in 2008 to 50% in 2023. That's downright embarrassing. Why is the EU such a laggard? First, because they have imposed stifling red tape on their domestic companies. Even the International Monetary Fund has chastised France, for instance, for their rigid work rules, which makes the hiring and firing of workers expensive. Second, because the EU has prostrated itself on the altar of climate change. Its dedication to renewables has led to high power costs, with German companies, for example, paying nearly three times what the U.S. does for industrial electricity. With new technologies like AI requiring vast amounts of energy, the EU is uncompetitive. Third, the EU is hampered by its cumbersome architecture; getting more than two dozen nations to sign off on major policies is difficult, which has meant the continent has fallen behind on technological innovation. That means low productivity and GDP growth. EU officials are certainly not unique in expressing frustration over President Trump's tariff battle. The conventional wisdom from economists and business leaders has been that tariffs will choke off trade and make the world poorer. Roger Altman, the successful founder of investment bank Evercore, appeared on CNBC on Monday saying, "Eventually, the tariffs will be passed on, dollar for dollar, to the consumer, and that will mean less consumption, less growth, less jobs and less profit." Maybe, but it's also possible that companies will bring more production to the United States, to avoid tariffs, and that the revenues pouring into the Treasury, over $100 billion to date, will boost our fiscal outlook. Coupled with lower tax rates and lighter regulation, the trade battle is already attracting increased investment. Trump has proved the conventional wisdom wrong more often than not; I wouldn't bet against his tariff program.
Yahoo
29 minutes ago
- Yahoo
Democrats blast Lutnick for reversal on China, semiconductors
A group of congressional Democrats blasted the Trump administration's decision to allow advanced computer chips made by Nvidia to be sold in China, in a set of letters sent to Commerce Secretary Howard Lutnick. In a letter to Lutnick on Sunday, Reps. Raja Krishnamoorthi (D-Ill.) and Gregory Meeks (D-N.Y.) said the administration was using export controls on semiconductors and advanced computer parts as a 'bargaining chip,' a move they contended 'risks eroding the credibility of our export controls regime, blurs the line between economic and security priorities, and sends a dangerous signal that critical guardrails are up for negotiation.' The White House announced in May that it would restrict sales to China of Nvidia's H20 chip, widely used on artificial intelligence (AI) models. But in mid-July, it changed course, with Lutnick telling CNBC the reversal was linked to a trade deal involving rare earth magnets. Administration officials including Treasury Secretary Scott Bessent are in Stockholm this week for trade talks with China aimed at extending a shaky truce on tariffs between the two countries. Lutnick was not in Stockholm for the first day of the talks Monday, Bloomberg reported. The letter from Krishnamoorthi and Meeks was followed by another message from a group of five Democratic senators to Lutnick on Monday, calling the administration's position on semiconductors 'extremely troubling.' China's 'development of advanced Al capabilities represents a clear risk to the United States' national and economic security,' Democratic Sens. Mark Warner (Va.), Jack Reed (R.I.), Elizabeth Warren (Mass.), Chuck Schumer (N.Y.) and Chris Coons (Del.) wrote. 'We urge you to swiftly reverse course on these ill-advised actions and protect American advantages across the compute stack.' The tussle over computing chips comes after the White House unveiled an artificial intelligence action plan last week aimed at scaling up American investments and innovation in the industry, with an eye on competing with China. Lutnick also faced questions from Republican lawmakers last week over AI chip exports after the White House rescinded a Biden-era control on chip sales worldwide. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
