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Posted: 2023-07-21 09:02:55

For years, Moses Uludong has been a lonely voice pushing the small, strategically located Pacific island nation of Palau towards closer relations with China.

Uludong founded Palau's first newspaper, Tia Belau, more than five decades ago, back when the archipelago was under US administration.

Now, as tensions rise between China and the West, Uludong thinks Palau could be devastated if war breaks out between the two powers.

The nation of 18,000 people became independent in 1994, but is still a close US ally and one of only 13 countries worldwide to defy China by recognising Taiwan diplomatically.

So, in 2018, Uludong entered into a deal to set up a new media group that he believed would help restore some balance.

What he did not realise was that the initiative was backed by investors with ties to China's police and military, public records obtained by the Organized Crime and Corruption Reporting Project (OCCRP) show.

The Palau Media Group was the idea of an old friend, Tian "Hunter" Hang, an expatriate Chinese hotelier on the island, Uludong told OCCRP.

The company was supposed to raise Palau's profile in China by making it a "hub of information", he said, bringing news from across the Pacific to a Chinese audience.

"We want to sell Palau, you know, [to get] investment from China," he said.

Though the new media group had a launch event in Hong Kong, it never fully got off the ground.

Nevertheless, the deal appears to have aided in another goal — spreading Chinese influence in the Pacific country.

Emails obtained by reporters show that, shortly after launching the venture, Mr Tian used Uludong's existing newspaper on at least one occasion to publish pro-Chinese content.

A middle aged bespectacled north Asian man wears a black shirt and looks away from the camera as he moves through a crowd.

Tian Hang was behind the Palau Media Group and is a leading figure in China's attempts to influence Palau.  (Supplied: OCCRP)

Although modest, the efforts fit a broader pattern.

An OCCRP investigation published last year identified Mr Tian as a leading figure in China's influence operations in Palau.

Experts say the case shows how China is seeking to exert its influence in the Pacific region by using political pressure and funding to capture local elites, including in the media.

"In a broad sense, this is similar to what we see in other countries where China has no diplomatic presence, but is looking to shape the political elite to be more friendly," said Graeme Smith, an expert on China's role in the Pacific at the Australian National University (ANU).

China's long-term goal in such efforts is "engineering a switch in diplomatic relations away from Taiwan", he said.

"The Chinese, they have a way of doing business," Uludong said.

"They are really not open."

A flavour of espionage

The largest shareholder in Mr Tian and Uludong's abortive venture was Overseas Chinese Big Data Group (OCBD), a Chinese company that works with universities and research institutes affiliated with China's military and public security organs.

It is owned by businessmen from Mr Tian's home province, Henan, and is headquartered in the southern megacity of Shenzhen.

Hong Kong corporate documents show that OCBD owned a 40 per cent stake in the Palau Media Group when it was founded in November 2018 with $HK1 million (about $188,900) in capital.

Mr Tian and Uludong each controlled 30 per cent.

A man with greying hair smiles as he wears a light blue shirt and poses for a headshot.

Moses Uludong says he has been to China several times to promote trade. (Supplied: OCCRP)

Uludong said he did not contribute any of the startup cash himself, and all he knew about OCBD was that it was a "media company from Shenzhen".

In fact, OCBD oversees a network of two dozen firms whose names suggest that they work in a wide variety of fields, including blockchain technology and media.

One of its main firms states on its website that it is in a strategic partnership with two national security institutes — including the Chinese People's Public Security University.

OCBD also works with the military-run Information Engineering University in Henan, which focuses on educating "political warfare officers and carrying out offensive cyber operations", according to the Australian Strategic Policy Institute (ASPI) think tank.

Dr Smith said the fact that OCBD works with "a military university that trains people in hacking and signals intelligence" lent a "flavour of espionage" to the group's investment in the Palau Media Group.

The media initiative was not OCBD's first foray into the island, as OCCRP reported in December.

The company founded the Chinese Economic Trade Promotion Association in 2017 in partnership with Mr Tian and former Palauan president Johnson Toribiong.

OCBD has also registered other Pacific-focused companies which — like the Palau Media Group — have so far not resulted in any noticeable business activity.

These include tourism-related and e-commerce companies focused on Palau and Vanuatu, as well as another firm called South Pacific Internet Technology.

OCBD did not respond to written questions.

The Chinese People's Public Security University and the People's Liberation Army Information Engineering University did not respond to questions sent by OCCRP.

Pacific battleground

If OCBD's Pacific initiatives have achieved little, other Chinese efforts have been more successful.

Perhaps no other Pacific nation illustrates China's potential to win friends than Solomon Islands.

National flags for the Pacific Islands Forum

China's increasing Pacific influence has led to fears the region could again become a battleground between a rising Asian power and Western opponents. (AP: Jason Oxenham/Pool)

Not only did Solomon Islands cut diplomatic ties with Taiwan in 2019, but in 2022 the country also signed the China–Solomon Islands security agreement, which aims to increase law enforcement capacity.

The security pact raised alarm in the US and Australia, which are at the forefront of the geostrategic battle with China for dominance in the region.

The agreement was followed by a "propaganda and disinformation" campaign by the Chinese Communist Party (CCP) aimed at "undermining Solomon Islands' existing partnerships with Australia and the US", according to a 2022 report by ASPI, which is considered to be closely aligned with Australian foreign policy goals.

Part of the CCP strategy is to cosy up to local media, including newspapers like the Solomon Star, according to ASPI.

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