A Vast Ocean of Power: How the South Pacific Became the Next Front in U.S.–China Rivalry

by Staff Correspondent

The South Pacific—home to a constellation of small island nations scattered across a vast expanse of ocean—has emerged as an increasingly contested arena between Washington and Beijing. German scholar Dr. Gudrun Wacker, Senior Fellow at the German Institute for International and Security Affairs (SWP), told delegates at the Indo-Pacific Regional Dialogue (IPRD) 2025 in New Delhi that the region’s significance lies not in its size but in its strategic reach.

“These are not small islands but big ocean states,” Dr. Wacker said. “The landmass may be only 300,000 square miles, but the exclusive economic zones add up to 7.7 million square miles.” That enormous maritime footprint, she argued, explains why two of the world’s largest powers are competing so intently for influence.

A strategic expanse

Dr. Wacker’s presentation, “Options for Cooperative Counterbalancing of China in the South Pacific,” mapped how the scramble for influence has redrawn patterns of diplomacy, aid, and security cooperation across 12 independent island nations and nine associated or dependent territories.

The South Pacific’s importance is rooted in geography. The islands sit astride critical sea lanes and host assets of immense strategic value—from tuna-rich fisheries to seabed minerals and undersea communication cables. Many also possess airfields and ports capable of supporting military and commercial operations. “These are not just resources; they are critical infrastructure for global connectivity,” she said.

The islands also wield disproportionate diplomatic leverage. As members of the Small Island Developing States (SIDS) group at the United Nations, they collectively represent nearly 40 states and 18 associate members. “This is something the Chinese like because they try to get support for what they want at the U.N. level,” Dr. Wacker observed.

Only Papua New Guinea, Fiji, and Tonga maintain their own militaries. The rest rely heavily on partners—particularly Australia and New Zealand—for defense cooperation and maritime law enforcement. But China’s rising profile in regional security has begun to unsettle that long-standing order.

The aid economy

Development aid has become a key vector of influence. According to Dr. Wacker, total aid to the region fell by 18 percent between 2021 and 2022, largely due to the economic fallout from COVID-19 and the war in Ukraine. Yet geopolitical competition has filled some of the gap.

Australia remains the dominant donor, but China has reasserted itself as the second-largest provider of aid, focusing on infrastructure—roads, ports, and airstrips—as well as climate and disaster-relief initiatives. “China is basically everywhere now,” she said.

Beijing’s 2022 security pact with the Solomon Islands showcased both its diplomatic reach and its limitations. Eleven other Pacific nations—Fiji, Kiribati, Marshall Islands, Micronesia, Nauru, Palau, Papua New Guinea, Samoa, Tonga, Tuvalu, and Vanuatu—declined to sign a broader regional deal, wary of provoking strategic backlash or losing autonomy.

America’s wavering hand

The United States, meanwhile, has struggled to maintain consistency. During President Joe Biden’s first term, Washington reopened embassies and hosted two Pacific Island summits, signaling renewed engagement. But under the second Trump administration, aid allocations have been trimmed and tariffs imposed, even against close partners such as the Marshall Islands and Palau.

For the island states, this oscillation presents both opportunities and risks. Some welcome external investment; others fear being drawn into a zero-sum rivalry between major powers. “The Pacific Islands don’t want to be playgrounds for U.S.–China strategic rivalry,” Dr. Wacker cautioned. “For them, no zero-sum logic exists.”

Climate, continuity, and control

Despite the strategic courtship, the islands’ most immediate concerns remain existential—rising sea levels, extreme weather, and economic vulnerability. Yet their oceans, ports, and U.N. votes ensure they will remain integral to the geopolitical calculus shaping the Indo-Pacific.

As the competition intensifies, the South Pacific’s small states—anchored in vast waters—may prove decisive in determining whether the region drifts toward confrontation or cooperation.