China sought control of submarine cables to spy, says Micronesia

Outgoing president alleges Beijing is systematically bullying strategically located island paradise

The outgoing president of the Federated States of Micronesia (FSM), David Panuelo, penned a lengthy letter last week accusing Beijing of rampant bribery, spying and other tactics – including an attempt to take control of the nation's submarine cables and telecoms infrastructure.

In the letter, Panuelo claimed that the People’s Republic of China (PRC) has instructed its army to be ready to invade Taiwan by 2027. "China is seeking to ensure that, in the event of a war in our Blue Pacific Continent between themselves and Taiwan, that the FSM is, at best, aligned with the PRC instead of the United States, and at worst, that the FSM chooses to 'abstain' altogether."

The South Pacific country is made up of over 600 tropical islands. It is situated north of Australia, east of the Philippines and west of Hawaii in an area that students of World War II will know is critical during any naval engagement in the Pacific. Concerns have been expressed that China intends to establish a naval base in the region.

Control of our fiber optic cables would allow them to read our emails and listen to our phone calls

"Senior officials and elected officials across the whole of our National and State Governments receive offers of gifts as a means to curry favor," explained Panuelo in the letter. He accused senior and elected officials of taking actions contrary to the interest of their constituents in favor of interests of the PRC.

The gifts ranged from envelopes full of cash, to rides on private jets, and smartphones handed to officials as they exited China.

As if those phones could possibly include spyware or malware.

According to Panuelo, Chinese operatives followed him, that there were threats to his personal safety, and that Chinese officials would attempt to convince officials to act measures already agreed upon – for example signing an MOU even though it had been officially denied.

"One of the reasons that China's Political Warfare is successful in so many arenas is that we are bribed to be complicit, and bribed to be silent," said the FSM official.

"This isn't rare. This happens all the time, and to most of us – not just some of us," wrote Panuelo. He alleged that 39 out of 50 members of parliament in the Solomon Islands received payments from China prior to a vote on postponing elections.

Panuelo described having to change his phone number after harassment from the Chinese ambassador and the general hassle of dealing with officials who never take "no" for an answer, using vagueness and broadness as a tactic to coerce officials into agreements.

"Just because something is not technically legally binding doesn't mean you won't find yourself beholden to it," warned Panuelo.

The president gave examples of other countries he said fell to that fate: Djibouti, Zambia, Uguanda, Ethiopia, and Sri Lanka.

"If these locations seem so foreign to us, I'll remind you that they too began with documentation very similar to the Deeping the Blue Economy [Memorandum of Understanding] MOU I rejected in December 2022," said the president.

Panuelo said that particular MOU opened a door for the PRC to acquire control over the submarine cables connecting FSM to the world, and its physical ports.

"Some of the core concepts included China wanting to possess ownership of our ocean resources, and to create a Marine Spatial Plan for its own uses such as for deep-sea mining; control of our fiber optic cables and other telecommunications infrastructure, which would allow them to read our emails and listen to our phone calls," he states in the letter.

Panuelo's accusation of debt trap diplomacy has been identified as a risk of working with China, which has offered loans on terms small nations may not be able to afford. Defaults lead to Chinese entities taking ownership of assets.

In May China reportedly began talking to ten nations in the South Pacific with an offer to help them improve their network infrastructure, cyber security, digital forensics and other capabilities – all with the help of Chinese tech vendors.

Panuelo said he met with Joseph Wu, Taiwan's foreign minister, to discuss switching diplomatic relations to support Taiwan over China. Among the assistance FSM could receive – along with medical, food security and job enhancement – was a cash injection of $50 million over a three-year period and an annual $15 million assistance package. Taiwan also allegedly promised to "pick up" any and all abandoned projects from China – such as a convention center, government complexes, gyms and more.

Precedents exist for switching allegiances. Pacific nations Kiribati and The Solomon Islands have both switched away from Taiwan to PRC in the past five years.

At a daily briefing on Friday, Chinese Foreign Ministry spokesperson Mao Ning said she had seen relevant reports regarding Panuelo's letter.

"China firmly opposes countries that have diplomatic ties with China engaging in any form of official interaction with the Taiwan region in violation of the one-China principle. On the basis of the one-China principle and in the spirit of mutual respect, equality and mutual benefit, China stands ready to work with the FSM to enhance friendship and cooperation," said the spokesperson.

Panuelo has held the presidency since 2019 but lost his seat in Congress when FSM held its general election on March 7. The letter was written on March 9, two days later.

He leaves power on May 11, when members of Congress vote for a new head of state. According to Panuelo's letter, FSM officials have been told China is simply waiting for the next president to take power before they start pushing some of the agenda he's blocked.

Panuelo has form as an author of scorching letters critical of China. In March 2022 he wrote [PDF] Solomon Islands prime minister Manasseh Sogavare regarding a security deal. In May, he warned Pacific Islands leaders again, urging them to reject a Chinese trade and security agreement.

"We can play an essential role in preventing a war in our region; we can save the lives of our own Micronesian citizens; we can strengthen our sovereignty and independence," argued the president in his newest letter. ®

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