Why Nauru’s China Switch Matters to Australia

“Never ask someone to do something that you wouldn’t do yourself” – it’s a decent rule to live by. Yet when it comes to diplomatic recognition, things aren’t so simple. Although most countries play the game of only holding unofficial relations with Taiwan to keep China placated, there has been an unacknowledged desire from countries like the United States and Australia for those remaining countries who recognize Taiwan to continue to do so – although it is something Washington and Canberra wouldn't themselves do.

Since 2016, China has been successful at drawing away Taiwan’s diplomatic allies. Over the course of eight years, 10 countries have switched recognition to China, with the latest being Nauru in January 2024. Only 12 states continue to recognize Taiwan, officially holding diplomatic relations with the Republic of China (ROC) instead of the People’s Republic of China (PRC).

While countries like Australia made the shift to recognizing Beijing in the 1970s, they’ve always seen a strategic importance in smaller countries of the Pacific continuing to hold official diplomatic relations with Taiwan. This has roots in the nuances of Australia’s One China policy – which acknowledges that the PRC believes that Taiwan is part of its territory, but doesn’t necessarily agree on that detail. The reasoning has been that as long as some countries still recognize the ROC, it doesn’t give the PRC total legitimacy. This leaves a diplomatic door open – even if only slightly – for the PRC’s potential replacement.

Nauru’s decision to switch its diplomatic recognition to Beijing has undermined this strategy. Following other recent shifts from Solomon Islands and Kiribati (both in 2019), the diplomatic space for Taiwan in the Pacific is clearly diminishing. The pressure from Beijing has been intense on these island countries, and often the financial rewards for switching recognition have been irresistible. For Nauru, with its limited resources, Beijing’s deep pockets were quite attractive.

Australia sought to prevent these flips from occurring. Part of Australia’s strategy for its offshore detention center on Nauru has been to keep the island nation financially afloat. With the island’s phosphate deposits having been fully exploited, and Nauru’s governments having mismanaged the revenue from what was once a highly lucrative industry, hosting Australia’s main detention center became its primary source of income.

Yet Australia’s approach to maritime asylum seekers had a second pillar that included using the navy to turn back any boats leaving Indonesia. The success of this pillar meant that the numbers of asylum seekers being sent to Nauru soon dried up. Sensing a threat to its income heighted the attractiveness of the only other realistic option Nauru had – switching diplomatic recognition to China.

For China, there is more at stake than just the embarrassment of having a number of countries that don’t recognize it as a state. There are practical problems that this creates. Given Beijing’s desire to be the dominant power within the Asia-Pacific, having a number of countries that don’t recognize it within the island chains that radiate out into the Pacific has been an impediment. At the very least Beijing would be hoping to close out any Taiwanese representatives being invited to the annual Pacific Islands Forum leaders meetings.

With only Tuvalu, the Marshall Islands, and Palau still recognizing Taiwan in the Pacific, Beijing has managed to limit the diplomatic space that Taiwan has in the region.

Whether it is able to pry these states away as well is the next question. In particular Palau and the Marshall Islands have strong cultural links with Taiwan’s Indigenous people that they wish to maintain, and that’s something Beijing cannot be trusted to allow to continue. Nauru also had these links, but its financial situation was a more decisive factor.

For Australia, this is less than ideal. Although it would be hypocritical for Canberra to advise its neighbors against switching diplomatic recognition to China, the recent states that have done so – particularly Solomon Islands and now Nauru – have complicated Australian foreign policy. The primary doctrine of this foreign policy has always been to prevent military access to Pacific Islands by powers not aligned with Australia. Such access could provide forward bases for any attempt to attack Australia.

As long as there was a significant number of Taiwanese diplomatic allies in the region, this prospect was greatly diminished. But as Beijing has used its financial weight to pry countries away from Taiwan, the prospect of greater Chinese access in the region gains potential. This is particularly the case with a country like Nauru, which is desperate for new sources of income. No longer being able to rely on Taiwan’s regional connections, Australia will need to find creative ways to limit China’s influence.