Sun Lee
Palau has levelled serious allegations against China of cyberattacks, raising speculations about China’s efforts to increase its influence in the Pacific region. Palau’s President Surangel Whipps Jr. recently confirmed that the Pacific island nation experienced its first major cyberattack. Whipps, who was on his visit to Japan, described the attack as the first major breach of Palauan government records. More than 20,000 documents were stolen, including sensitive information about U.S. radar installations, Japanese Navy crew lists, and details about Palau’s diplomatic relationship with Taiwan.
The cyber attack on Palau occurred shortly after the island nation signed a new 20-year economic and security deal with the United States, highlighting its growing importance to Washington’s efforts to counter Beijing’s influence in the Indo-Pacific. The attack, which resulted in the theft of thousands of government documents, has been attributed to China by Palauan officials. For China, Palau has become an increasingly critical player due to its strategic location and its diplomatic ties with Taiwan, which China claims as its territory. Beijing has enticed other countries, like Nauru, another Pacific nation, to sever ties with Taipei. Meanwhile, Taiwan has condemned the cyber attack, saying that it was ready to help Palau beef up its digital defenses against “authoritarian infiltration”.
Meanwhile, China rejected the accusation, and experts said that Palau has not presented any evidence that implicates Beijing. A ransomware group known as Dragon Force has claimed responsibility, saying it carried out the hack purely for financial gain. The group has threatened to do more harm to Palau.
Palau’s leaders have accused China of orchestrating the hack, suggesting that it was a politically motivated attempt to pressure Palau over its ties with Taiwan. A report in the New York Times quoted a Palauan official stating that the hack was political because Dragon Force had made no effort to negotiate a ransom. Additionally, by using a ransomware group, Beijing reduced the risk of a diplomatic incident with Washington, according to the official, Jay Anson, the chief information security officer at the Palau Ministry of Finance.
“We assessed that they must be getting paid by someone else to make this lucrative,” said Anson, whose ministry was the one the documents were stolen from. “It was about politics, not payment.” Experts said that Palau could have been targeted by China, but it would be unusual to subcontract out a cyberattack to a ransomware group, stated the US daily.
A senior Palauan leader has accused China of meddling in Palau’s domestic affairs. Whipps claimed to have received a phone call from the Chinese ambassador in Micronesia asking him to cut ties with Taiwan if elected; Whipps was a presidential candidate at that time.
In February, Palau accused China of making financial offers. President Whipps had highlighted in a letter to a U.S. senator that China had made financial offers to Palau, including filling every hotel room and providing $20 million annually for a “call center” to sway Palau away from its relationship with the U.S. and Taiwan.
Ironically, China’s efforts to exert influence in Palau are not limited to financial offers and alleged cyberattacks. According to a news report on Abc.net.au, investigations by the Organized Crime and Corruption Reporting Project (OCCRP) revealed that China had been using political pressure and funding to capture local elites and influence the media in Palau. One notable case was related to Moses Uludong, a prominent Palauan journalist who founded the country’s first newspaper. In 2018, Uludong entered into a deal to establish a new media group aimed at increasing Palau’s profile in China. However, this initiative was backed by investors with ties to China’s police and military.
The media group, which had a launch event in Hong Kong, was intended to serve as a “hub of information” for a Chinese audience. Emails obtained by reporters show that shortly after its launch, the group used Uludong’s existing newspaper to publish pro-Chinese content. This effort, though modest, fits into a broader pattern of Chinese influence operations in the Pacific. However, experts
believe that China has been using such tactics to exert control over local narratives and sway public opinion in favour of Beijing. The case of the Palau Media Group illustrated how China sought to penetrate local media and other institutions to extend its influence in strategically important regions like the Pacific Islands.
Though China has denied allegations of a cyberattack, the incident highlighted the growing geopolitical contest in the Pacific region. Palau’s strategic importance to the United States and its diplomatic ties with Taiwan make it a key battleground in the struggle for influence between Washington and Beijing. The incident underscored the need for enhanced cybersecurity and strategic partnerships to counteract authoritarian influence from China and protect democratic values in the region.
Sun Lee is the pseudonym for a writer who covers the Asian region.
