Abstract

As geopolitical rivalry intensifies in East Asia, tensions between China and Japan spill into the Pacific as the two compete for influence in the region. This paper in return examines how both Tokyo and Beijing leverage economic and commercial statecraft as well as maritime security to advance their strategic position within Pacific Island Countries (PICs). It argues that whilst Japan engages in development aid and maritime security through asymmetrical multilateralism, China primarily relies on a bilateral use of debt-trap dynamics and dual-use infrastructure. Through the lens of liberal institutionalist theory, Tokyo’s vote-seeking “Free and Open Indo-Pacific” strategy contrasts from Beijing’s bilateral isolation of Taiwan, situating the differing strategies within the “Blue Pacific" narrative of PIC autonomy. 

Keywords: China-Japan competition, minilateralism, aid and development, Pacific Islands Countries (PICs)

Introduction

In September 2025, Pacific Islands Countries (PICs) attending the Pacific Islands Forum (PIF) made the unprecedented decision to ban all dialogue partners from the summit, including the United States (US), the European Union, China and Japan (Simes, 2025; CSIS, 2025). Whilst it could be seen as a multilateral decision and agency from the PICs, this decision reflects the great power competition in the Pacific: both China and Japan aim at developing their influence among PICs. There are strategic interests behind—PICs Exclusive Economic Zones span over 10 million square miles that is around 10% of the world’s total ocean surface (East–West Center, n.d.), and diplomatic interests. This engagement in the Pacific both from these East Asian giants reflects the displacement of geopolitical tensions in East Asia into the Pacific. Thus, this also raises a critical issue as to how do China and Japan respectively leverage PICs through respective maritime security and development aid to support their geopolitical competition. This paper argues that Japan opted for a strong engagement in development aid and maritime security through asymmetrical multilateralism whilst China turned toward debt-trap and dual-use infrastructure through bilateralism to ensure a stronger position in the Pacific. 

Japan's Multidimensional Engagement with the Pacific Island Countries: Development Aid and Maritime Security

Japan’s strategy in the region towards Pacific Island Countries (PICs) consists of two main components: aid and development, as well as strategic maritime security and defense partnerships. In a recent update to Japan’s Free and Open Indo-Pacific framework (FOIP), Prime Minister Sanae Takaichi reiterated the three pillars of Japan’s strategy to ensure security and stability in the Indo-Pacific region: ensuring the economic resilience of value chains and the supply of critical energy resources; developing public-private economic partnerships; and strengthening Official Security Assistance (OSA) and Official Development Assistance (ODA) (Kamisuna, Ishimaru, 2026). ODA, consists respectively of grant-aid and concessional loans for developing countries, whereas OSA concerns “grant-aid specifically aimed at strengthening the military and security capacities of partner countries” (Lambino, 2025). This third pillar is of particular relevance to the Pacific Island Countries, since all of them are also Small Developing Islands States. It is also expanding rapidly, as evidenced by the increase in its budget: “Takaichi’s FOIP will also ‘enhance the use of ODA for security,’ including port and airport development for Pacific Island countries as initial projects. Japan’s ODA budget also increased in FY2026 for the first time in three years, reaching around 580 billion yen (US$3.75 billion).” (Kamisuna, Ishimaru, 2026). Thus, Japanese development assistance to the PICs is characterized by five main areas: health, infrastructure, climate change mitigation, maritime affairs, and education and people-to-people exchange. For example, in the area of health, Japan provided 550 million yen in aid for a medical ship to the Marshall Islands (Ministry of Foreign Affairs of Japan, 2020). Regarding infrastructure, Japan invested 3.805 billion yen in the “Nippon Causeway” road in Kiribati, connecting Beto Island to Bairiki (Ministry of Foreign Affairs of Japan, 2020). To address climate change, Japan provided 2.1 billion yen in aid to the Kingdom of Tonga for the construction of a tiltable wind turbine under the Project for Installation of Wind Power Generation System (Embassy of Japan in Tonga, 2018). In the maritime sector, Japan is working with the PICs to combat Illegal, Unreported, and Unregulated (IUU) fishing, particularly tuna fishing (Ministry of Foreign Affairs of Japan, 2020). Finally, in the field of education, Japan has supported more than 360 schools (including 75 in Fiji) across the PICs through the Grant Assistance for Grass-Roots Human Security Projects Programme (Ministry of Foreign Affairs of Japan, 2020). These examples clearly illustrate the diversity of Japanese development aid, an effort embodied by the Pacific Alliance Leaders Meeting (PALM) summits, a forum bringing together Japanese and Pacific leaders; the most recent, PALM 10, took place in Tokyo in 2024 (Government of Japan, 2024). 

Japan’s development assistance to the PICs continues to serve as the cornerstone of Tokyo’s regional engagement, driven by a convergence of economic, diplomatic, and strategic imperatives, fitting in Japan’s liberal institutionalist agenda. As Céline Pajon notes, “the wealth of these territories in fishery resources and raw materials, the crucial importance of the maritime routes, and the strategic geographical location of PICs in the context of Sino-American rivalry have been key factors behind Tokyo’s expanding engagement” (Pajon, IFRI, 2023). However, development aid is no longer the sole component of Tokyo’s foreign policy toward the PICs. Japan’s foreign policy toward the PICs is now also based on cooperation in the areas of defense and maritime security.

Indeed, Japan’s defense cooperation with the PICs is intensifying: “Japan, Pacific Island states forge stronger security ties for Free and Open Indo-Pacific” (Indo-Pacific Defense Forum, 2024). The strengthening of defense ties between Japan and the PICs is exemplified in particular by the Memoranda on Defense Cooperation and Exchanges signed between Japan, Tonga, Fiji and Papua New Guinea (Ministry of Defense of Japan, 2026) following the 3rd Japan–Pacific Islands Defense Dialogue (JPIDD), which took place in February 2026 in Tokyo (Pacific Islands Forum Secretariat, 2026). This defense cooperation is further exemplified by programs such as the Japan–Pacific Island Countries Ship Rider Cooperation Program. This program allows participants (military and police officers from the PICs) to “exchange views on a variety of topics including international maritime law, observe exercises on the ship, and deliver a presentation on their respective countries’ perspectives on maritime security” (Ministry of Defense of Japan, 2024). It facilitates the sharing and maintenance of a common understanding of maritime law and law enforcement. This program was also mentioned at the 3rd JPIDD: “Japan introduced its initiatives, including the Ship-rider Program, in which naval officers and maritime law enforcement officers from 11 Pacific Island countries embarked on the helicopter destroyer JS Ise, traveling from Sasebo Port to Manila Port to share knowledge related to maritime security” (Ministry of Defense of Japan, 2026), and is part of the defense cooperation between Japan and the PICs, particularly with regard to training: “Japan also introduced joint training initiatives, such as boarding and inspection training conducted by the Japan Maritime Self-Defense Force with Pacific Island countries” (Ministry of Defense of Japan, 2026). The terms “security” (Ministry of Defense of Japan, 2026), “crisis response” (Ministry of Defense of Japan, 2026), and “resilience” (Ministry of Defense of Japan, 2026) are now at the forefront of relations between Japan and the PICs.

China’s Strategy in the Pacific: Debt Trap and Dual-use Infrastructure

Whilst China is a principal donor to the PICs, its model diverges drastically from Japan’s grant-aid infrastructures. Chinese assistance into the region is harnessed through concessional loans as well as state-owned enterprises supported by Belt and Road Initiative investment, whom together develop infrastructure through construction and resource extraction (Pryke, 2020). High-visibility public buildings, such as the Chinese-funded presidential complex in Vanuatu's Port Vila, serve as emblematic reminders of development diplomacy and the consequential political affinity PICs now have with China. These initiatives are placed at the priority of China’s economic and commercial statecraft in the region instead of the climate-adaptation priorities that much of the Pacific is facing (Zhang, 2018). Beijing consolidated its regional influence despite a fall in aggregate aid volumes, demonstrating the importance of positive relations in the region over development (Zhang, 2018). In the words of Bozzato, the nature of Chinese aid is a “gift that binds”, whereby their assistance is innately tied to obligation and dependency for receiving countries, in that case PICs (Bozzato, 2017). Through this rhetoric, the sharpest contrast between Japanese and Chinese influence is evidenced in the maritime-economic and commercial sphere: whereas Tokyo is seen aiding PICs in the policing of IUUs within the dedicated economic zones, China instead operates the world’s largest distant-water fishing fleet of approximately 2,700 vessels which have been documented to operate in the Western, Central and wider Pacific waters—making it an active site of Chinese IUU activity (Congressional Research Service, 2022; European Parliament, 2022). 

Within the realm of maritime security, both Japan and China pursue the power of PICs strategic geography, albeit through different means. Whilst Japan develops its sovereign maritime enforcement of the PICs through patrol vessels, surveillance technology and coast-guard training, China by contrast employs dual-use infrastructure and embedded security arrangements—most prominently, the 2022 security pact with the Solomon Islands, alongside the proliferation of Chinese-funded ports and runways in the Solomons and Kiribati. These arrangements have permitted the frequent deployment of Chinese police and military in the region, raising local concerns over the potential prospect of permanent Chinese naval and paramilitary presence (The Strategist, 2022). Whilst the pertinence of “debt-trap diplomacy” is contested within the Sino-Pacific context, Beijing’s pivot reflects much of Tokyo’s own shift from commercial to security partnerships, albeit generating fears over militarisation and the erosion of PIC sovereignty (Haimeri, 2020). 

Japan and China: Competing Multilateralism and Bilateralism in Oceania

Beyond the mere descriptive aspect of Japan and China’s strategies with the PICs lies a deeper interrogation as to how to interpret both of their strategies in light of the liberal institutionalist theory of international relations—this theory advocates that cooperation is a sustainable and rational way to overcome the problem of anarchy in the international system. On the one hand, this section argues that Japan chose to engage in asymmetrical multilateralism in the Pacific: Japan engages in deliberate bilateral relations with the PICs, and maintains minilateral relations with great powers in the region—minilateralism is defined by Envall et al. as “small groups of (typically three to six) states that cooperate on specific issues of mutual interest” (Envall et al., 2024). On the other hand, this section will demonstrate that China failed to create a forum for multilateral relations, leading it to engage in bilateral relations with PICs for the isolation of Taiwan. 

Emerging from bilateral relations with the United States (US) in the Pacific, Japan made the choice to ground its diplomacy in minilateralism. Indeed, compared to broader multilateral institutions, minilateralism is more adaptable and enables states to pool resources. In the case of the Pacific, it aims not only at boosting economic competitiveness by circumventing economic coercion by China—mainly debt-trap and infrastructure investment, but serves as a platform for order-building in the region. Since 2002, Japan continues to engage  in the Trilateral Strategic Dialogue (TSD) with the US and Australia. In this minilateral institution Japan prioritizes material order-building through a hard security focus alongside provision of public goods and human assistance across the Pacific. Regarding hard security, the US Navy, the Japan Maritime Self-Defense Force, and Royal Australian Navy signed in July 2025 a trilateral logistics agreement covering missile reloading, flexible at-sea refuelling, and information and technology sharing (Envall et al., 2024). In 2018, the TSD developed its Trilateral Infrastructure Partnership to provide for infrastructure in the Pacific: through the Blue Dot Network since 2019, it coordinates investment and resources for projects including the creation of an undersea fiber optic cable for Palau announced in 2020. The budget is estimated around 30 million USD, equating to more than 10% of Palau’s GDP (US Department of State, 2020; World Bank, 2026). Thus, Japan’s minilateralism indeed includes the PICs, but more as recipients than equal decision-makers.

The Japanese relations with PICs developed through multilateralism and the aforementioned PALM meetings since 1997, a triennial for leaders to discuss development in the PICs—and for Japan to win votes at the UN (Segawa, 2023). Over time, it converged toward broader Japan–PICs cooperation: PALM5 in 2009 marks the creation of the Pacific Environment Community (PEC) and since PALM8 in 2018, New Caledonia and French Polynesia, even as they are not sovereign states were admitted to the table of negotiations (Segawa, 2023). Although states participating in the PALM are considered equal on paper, recent developments in PALM demonstrate the dominant position of Japan. At PALM9, Japan proposed the Pacific bond for the reinforcement of cooperation between Japan and the PICs. For PALM leaders and especially the Federated States of Micronesia and Palau, this “cooperation” recalls colonial times when Japan was “administrating” the islands under a mandate from the League of Nations from 1922 to 1947 (Oba, 2023). Thus, PALM leaders remain rather critical regarding PALM: they claim it to be more a policy platform for Japan in Oceania than multilateral diplomacy for Pacific Islanders themselves (Dvorak, 2023). In that regard, Kaitu’u Funaki, a Tongan political scientist, states that PALM is the opportunity for Japan to assist PICs to deal with their own limitations and be the “guardians of the ocean” on its behalf (Funaki, 2019), underscoring that it is not serving the PICs’ interests in the first place.

China also recently attempted multilateralism with PICs under the mandate of Vice Premier Hu Chunhua in 2019 (Xinhua, 2019). Nevertheless, compared to Japan, it resulted in a mitigated success. Indeed, the China-Pacific Island Countries Foreign Ministers’ Meeting was  held online in 2021 and pursued in 2022 through the China–Pacific Countries Five-Year Action Plan for Common Development (Julienne, 2026). China further sent a Five–Year Action Plan to 10 PICs and proposed the creation of a China-Pacific Island Free Trade Area (Maritime Security, 2023). These arrangements emerged from a unilateral input and ignored the role of the PICs agency:  the “Common Development Vision” from China was notably rejected due to a lack of consultation (Conolly, 2024). In light of the rejection of multilateralism by PICs, China started to engage in bilateralism. The case of the Solomon Islands makes the case: after the establishment of diplomatic relations in 2019 and a cooperation agreement signed in April 2022, the China–Solomon Island security pact leaked in 2024 despite official denial (Julienne, 2026; Segawa, 2023).

In the Pacific, China aims primarily at the diplomatic isolation of Taiwan. Indeed, among the worldwide states recognising the Republic of China (ROC), three are located in Oceania: Palau, Marshall Islands, and Tuvalu. These are the last of a long list of states that progressively recognised the People’s Republic of China (PRC) over ROC against development aid and maritime security. Therefore, behind the benevolence of bilateral relations hides pressuring diplomacy on these PICs: in 2024, Palau has been urged to forfeit their relations with ROC against commercial incentives (Moscioni, 2024). In the following, China invited Palau, Marshall Islands and Tuvalu for the 3rd China-Pacific Island Countries Foreign Ministers’ Meeting in Xiamen in 2025 (Julienne, 2026).

Conclusion

In conclusion, this article has shown that Japan and China have different foreign policy approaches toward the PICs. It is a space auspicious for the setting for “hedging strategies”: “whereby small and middle powers with limited resources seek to maximize their gains from great power competition in peacetime” (Julienne, 2026). Tokyo’s foreign policy toward the PICs is characterized by development aid, and now also by defense and maritime security cooperation. Chinese foreign policy, on the other hand, relies more heavily on the debt trap and dual-use infrastructure. Finally, Tokyo’s relationship with the PICs is more a matter of competing multilateralism, while Beijing prioritizes bilateral relations. 

These different approaches in the Indo-Pacific region are thus very interesting to observe and are linked to the emergence of a narrative: that of the “Blue Pacific.” This narrative seeks to assert Pacific Island states’ strategic autonomy and collective identity amid intensifying geopolitical competition in the Indo-Pacific and climate challenges. While it initially focused on the regional agenda, the narrative is increasingly being challenged by concerns over militarization and great power rivalry, as Pacific states seek to operationalize a posture of being “friends to all, enemies to none” (Tarte, 2023). Similarly, the “Partners for the Blue Pacific” initiative launched in 2022 (D’Ambrogio, 2025), which includes Australia, Japan, New Zealand, the United Kingdom, and the US, as well as the European Union, Canada, and South Korea, among others, highlights the key role of diplomatic relations with the PICs.

Edited by Xian Kostyrko