Palau has vowed to resist renewed pressure from Beijing to cut its diplomatic links with Taiwan.
One of just 20 nations keeping formal diplomatic ties with Taiwan, Palau was named in a notice issued by Chinese officials in December warning travel agencies that it was illegal to advertise group tours to destinations not on China’s approved list, Financial Times reports.
But while a clampdown on Chinese visitors would hurt the Palau economy, the nation said it had no plans to switch its allegiance away from Taipei.
“Palau is a country of laws, it is a democracy and we make our own decisions,” said Olkeriil Kazuo, spokesperson for Palau’s president, Tommy Remengesau.
China is the biggest source of visitors to tourist-dependent Palau, comprising roughly half the 113,000 visitors to the archipelago so far this year, according to the Asian Development Bank.
Tensions between China and Taiwan, a self-governed island that Beijing regards as a renegade province, were heightened last year when the Democratic Progressive party led by Tsai Ing-wen won power, replacing the more China-friendly Nationalist party, or Kuomintang.
The republication of China’s list of approved travel destinations reflects Beijing’s toughening approach towards Taiwan’s allies, experts said.
Kazuo said Beijing’s exclusion of Palau from its list of approved destinations — a measure in place for several years but to date not strictly enforced — has “never affected” the country.
Tourism growth “largely determines economic performance” — the sector accounted for more than half of Palau’s gross domestic product in 2015 — and a “significant” decline in visitors from China, Japan and Taiwan this year has already caused “uncertainty over near-term economic prospects”, according to the ADB.
Dilmei Louisa Olkeriil, Palau’s ambassador to Taiwan, said if the number of Chinese visitors suddenly fell, “of course the [tourism] industry will hurt”.
“If China says, ‘no tourists go to Palau’, then no tourists will come to Palau, we need to be aware of that,” she said, adding that Palau must further diversify its source markets to “protect us from something like this”.