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Chinese Foreign Minister Wang Yi and Kiribati's President and Foreign Minister Taneti Maamau meet after the Third China-Pacific Island Countries Foreign Ministers' Meeting in Xiamen, China, on May 28, 2025.
Beijing’s Island Breeze: China makes a play for power in the Pacific
Last week, something highly unusual was spotted off the coast of Japan. In an unprecedented show of naval power, two Chinese aircraft carriers were seen cruising together near the country’s easternmost islands of Minamitori and Okinotori—far out into the Pacific Ocean.
The carrier groups conducted drills alongside one another for the first time in Pacific waters, accompanied by jets, helicopters, and supporting warships.
The operations underscore Beijing’s growing bid for influence in the Pacific, and experts say they are part of a broader strategy that extends far beyond China’s immediate neighbors.
Less than two weeks ago, China’s foreign minister Wang Yi hosted senior diplomats from 11 Pacific Island nations in the southern city of Xiamen, where he pledged $2 million to support infrastructure building and climate adaptation efforts in the region.
The Pacific Islands are a valuable prize on the geopolitical chessboard – around a dozen nations comprising thousands of islands and atolls stretching more than 7,000 miles east of Australia.
“All of the Pacific Island region weighs into China's kind of broader strategy,” says Kathryn Paik, former director of Southeast Asia and the Pacific on the US National Security Council, who is now at the Center for Strategic and International Studies.
China has stepped up its engagement in the region in recent months—a trend underscored by its navy ships making an unprecedented voyage around Australia and carrying out live-fire exercises off the coast of Sydney earlier this year.
What’s motivating China’s drive into the Pacific? Closer ties with Pacific Island nations could boost China’s influence in international bodies like the UN, and they could also give Beijing preferential access to vast territorial waters containing mineral wealth and fish stocks.
But beyond those diplomatic and economic gains, there is a bigger goal as well, says Rory Medcalf, Head of the National Security College at Australia National University. Dominating the Pacific with naval power could increase China’s ability to “knock the United States out of a future war in the region.”
Once a key battleground in World War Two, the Pacific Islands now lie at the center of Beijing’s broader Indo-Pacific security strategy. From the Solomon Islands to Kiribati, China has made repeated attempts to leverage its development projects to gain access to strategic ports and airfields—with the PLA’s newest destroyer docking in Vanuatu’s Port Vila late last year.
“Any Chinese presence there would significantly complicate the US and Australian calculus when it comes to any contingency in either the South China Sea or Taiwan,” says Paik. “If they were to actually be able to build out a port in Solomon Island, similar to what they did in Cambodia, that would be just like a game changer for the US, Australia and others.”
What do the Pacific Islands want? Pacific Island countries face a multitude of development challenges stemming from geographic isolation and the impacts of climate change, to a growing flight of skilled workers. With a quarter of Pacific Islanders struggling below the poverty line—regional leaders will be turning to any and all partners capable of providing meaningful support.
“They want development assistance. They want economic growth. They want to protect their natural resources,” says Medcalf. “A lot of the development assistance China has provided has been effectively building grand infrastructure to satisfy the political needs of the government.”
China has ramped up its development assistance in recent decades, positioning itself as one of the largest aid providers in the region. Between 2008 and 2022, China committed $10.6 billion to various projects in the region, ranging from building transport infrastructure and government buildings, to supporting healthcare and education initiatives.
But China is still the challenger in a historically Western-aligned region. Australia remains by far the Pacific’s leading development partner, committing $20.6 billion over the same period. And other Western-aligned countries are active as well.
“It’s a permanent contest, with other players—not only the United States, but Australia, Japan, New Zealand, and, to some extent, the Europeans as well,” says Medcalf.
Together these countries have provided alternatives to Chinese assistance, with the QUAD countries—Australia, India, Japan, and the United States—announcing a range of multilateral initiatives to boost engagement in the region in 2023.
Beyond this, Pacific Island leaders and their constituents are skeptical about China’s growing security involvement and influence in local government. In 2021, the Solomon Islands’ decision to switch diplomatic recognition from Taiwan to China triggered nationwide anti-government protests, with rioters torching businesses in Honiara’s Chinatown.
“One of the biggest challenges for China is that the region certainly does prefer and is more just aligned culturally and historically with traditional western partners,” Paik says. “There's a lot of unsettlement about where the money's going, why the decisions are made, of certain types of infrastructure, of the governing of the government.”
Still the advantage the US and its allies currently hold over China relies on them “staying on the ball” in the region—an approach that analysts say the Trump administration has deprioritized. The US’ cuts to USAID programs, tariffs, and withdrawal from the Paris Climate Agreement and World Health Organization have opened the door for China to expand its influence in the region.
Last Wednesday, alarm bells rang in Canberra and London after the Pentagon announced that it was reassessing the AUKUS security pact, a multibillion dollar deal to counter Chinese influence by equipping Australia with a nuclear powered submarine fleet.
But while the geopolitical tides continue to pull the Pacific Island nations in different directions, their people are often focused on more immediate problems.
“We've actually got every chance of holding the line [against China], and most importantly, we've got to do it in a way that's respectful of the priorities of Pacific Island countries, because their priority is their own development,” says Medcalf.
How will the Trump presidency influence elections in Europe?
Carl Bildt, former prime minister of Sweden and co-chair of the European Council on Foreign Relations, shares his perspective on European politics from Stockholm, Sweden.
How do you believe that the Trump presidency will influence elections in Europe?
Well, of course we don't know. But what we've seen during the last week with important elections in Canada and Australia, not Europe, but fairly similar in other ways, is that the Trump factor has been very important. It has boosted the incumbent governments. It has boosted the center-left. It has boosted those who are seen as standing up to American pressure, and thus produced results both in Canada, primarily in Canada, but also in Australia. Very different from what practically everyone expected a couple of months ago.
Europe, different place. But still we have two important elections coming up, within slightly more than 10 days. We have the first round of the presidential election in Poland. That's very important for the future possibilities of the Tusk government to continue reforming that particular country. And we have the second round of the presidential election in Romania. An important country often forgotten. But there of course, we had gross interference from Russia and TikTok, and a candidate was banned. In both of these cases, we see the Trump presidency acting. They received, in the White House the other day, the opposition candidate. The extreme right nationalist opposition candidate the other day. And they've been making distinct noises in favor of the same political alternative in Romania. Will this backfire in the way it did in Canada, Australia? Remains to be seen. Very important elections both of them. Watch this space.
Crowds gather outside Buckingham Palace to watch a fly-past by the Red Arrows on the 80th anniversary of VE Day in London, United Kingdom, on May 05, 2025.
HARD NUMBERS: UK celebrates VE Day, Stock volatility boosts European banks, Trump wants Alcatraz reopened, Manhattan hosts Met Gala, Oceania rebuffs Trump’s film-tariff threat
1,300: On Monday, the United Kingdom started celebrating the 80th anniversary of VE Day, which commemorates the Allied victory of World War II, with a slew of street and tea parties across the country. There was also a 1,300-strong military procession along the Mall, the stretch of road connecting Buckingham Palace and Trafalgar Square. One million people flooded the area on the original VE Day, May 8, 1945.
13 billion: Donald Trump’s tariff bonanza induced a huge amount of stock market volatility, and the largest European investment banks are pleased as punch. This week, UBS, BNP Paribas, Société Générale, Barclays, and Deutsche Bank posted their largest quarterly revenues in over a decade, reporting a combined €13 billion ($14.7 billion) from equities and fixed income in the first quarter of the year. The stellar performance mirrors the hefty revenues that their American counterparts gathered in the first three months of 2025.
$60 million: Maybe there’s no escape from Alcatraz: Donald Trump wants to reopen the island prison, which was shut in 1963. “The reopening of ALCATRAZ will serve as a symbol of Law, Order, and JUSTICE,” the president wrote on social media. The prison, which sits just over a mile off the coast in the San Francisco Bay, once housed the notorious mobster Al Capone. It is currently operated by the National Park Service, which hosts 1.6 million visitors a year, generating roughly $60 million in revenue.
$75,000: New York City hosted the Met Gala on Monday night. Individiual tickets sold for a cool $75,000, with the money raised going to the Museum’s Costume Institute. Some have used the gala to spread political messages, like when Rep. Alexandria Ocasio-Cortez (D-NY) wore a dress with the message, “Tax the Rich,” to the 2021 iteration.
540 million: The governments of Australia and New Zealand vowed to protect their film industries after US President Donald Trump threatened to impose 100% tariffs on foreign films. The Oceanic pair have become a popular filming spot for Hollywood filmmakers, in part thanks to lower costs and government tax incentives. Australia alone has spent AU$540 million ($349.4 million) since 2019 to attract international film productions.
China's President Xi Jinping attends a meeting in Brazil in November 2024.
Tensions between China and the West heat up amid military exercises
Just days after a Chinese naval helicopter nearly collided with a Philippine patrol plane over a contested reef, China’s military started live-fire drills in waterways near Vietnam on Monday and between Australia and New Zealand over the weekend in an “unprecedented” display of firepower.
Beijing’s democratic critics put up their own show of force. On Sunday, France held military exercises with the Philippines and vowed to deepen their defense ties. On Monday, Japan followed suit, forging a security pact with Manila.
France, which is looking to assert its status as a Pacific power through its overseas island territories across the region, is now negotiating an agreement with the Philippines to allow troops to train on each other’s land, similar to the deal Manila has with the US and Australia.
At a meeting in Manila on Monday, Japanese Defense Minister Gen Nakatani and his Philippine counterpart, Gilberto Teodoro, agreed to work together to counter “unilateral attempts by China and other countries to change the international order and the narrative.”
After Vietnam released new maps marking what Hanoi considers its maritime boundary with Beijing, China on Monday began four days of live-fire military exercises in the Gulf of Tonkin. Vietnam has yet to respond.
Last week, Australia and New Zealand accused China of failing to announce the live-fire component of its military drills in international waters in the Tasman Sea. The abrupt shift in protocol forced commercial airlines to reroute flights last Friday morning. On Sunday, China’s Defense Ministry denied what it called “unreasonable accusations” from Canberra and Wellington.
It’s just the latest tensions between Australia and its largest trading partner. Earlier this month, a Chinese J-16 fighter plane released flares that passed within 100 feet of an Australian P-8 Poseidon surveillance jet flying over the South China Sea.
Where does it all go? Beijing has been trying to seize on the Trump administration’s cuts to international aid and America-first foreign policy to tighten its grip over the Pacific. But China’s early success at promoting economic and diplomatic relations are overshadowed by its “beefs” with most of its neighbors over sovereignty and national security, said Jeremy Chan, a senior analyst at the Eurasia Group.
“China can’t make friends with anybody,” Chan said. “If you zoom out and look at the South China Sea, China basically has a border dispute with almost every country in the Indo-Pacific. That puts a limit on Beijing’s ability to leverage Trump 2.0.”
An explosion is pictured at an exploration site of the company Greenland Anorthosite Mining of an anorthosite deposit close to the Qeqertarsuatsiaat fjord, Greenland, on Sept. 11, 2021.
Greenland’s thwarted rare earths miner hopes for change in March election
Greenlanders are set to go to the polls next month as US President Donald Trump increases pressure on Denmark to transfer sovereignty of the semi-autonomous Arctic island to the United States.
Australia-based Energy Transition Minerals, the mining company that holds the license for controversial rare earths and uranium deposits, is hoping the social-democratic Siumut Party – currently the second-largest contingent in the Greenlandic parliament, known as the Inatsisartut – will oust the ruling left-wing environmentalist Inuit Ataqatigiit Party in the March 11 election. The two parties are currently in a governing coalition together, with IA in the top position, but Siumut has attracted attention by pledging to hold a referendum on independence from Denmark this year.
After taking power in 2021, the IA banned uranium mining, effectively halting exploration of what Energy Transition Minerals bills as potentially the largest deposit of rare earth oxides in the world. Rare earths are a family of 17 metallic minerals needed for the batteries and magnets used for electric cars, power plants, and fighter jets. China dominates the supply chain, controlling roughly 70% of all mining and 90% of refining capacity.
The IA opposed the mining because of the high density of uranium mixed into the ore, which it feared would generate radioactive pollution along the island’s southwest coast, where much of the mostly indigenous population of roughly 57,000 lives.
Now, Energy Transition Minerals is betting Siumut, under whose rule the mining project was originally approved, will win and lift the moratorium to help generate more income for Greenland to achieve economic self-sufficiency and open the door to a long-sought breakaway from the Danish kingdom.
Awkward technicalities: With 7% of the company, Energy Transition’s largest shareholder is China’s Shenghe Resources, but the firm has vowed to supply the West with its metals. Thanks to America’s trade deals with the European Union and Australia, however, arcane Treasury rules may mean the Melbourne-headquartered company’s rare earths qualify for lucrative US tax credits. With the stock price trading at a fraction of a penny per share, however, Wall Street has doubts about the mining firm’s future.Endorsed by steelworkers onstage, then-Republican presidential nominee Donald Trump puts on a hard hat during his Make America Great Again Rally in Latrobe, Pennsylvania, on Oct. 19, 2024.
Trump tariffs steel and aluminum at 25%
US President Donald Trump signed an executive order Monday imposing 25% tariffs on all steel and aluminum imports to the US. This raises the tariff rate on aluminum to 25% from the previous 10% that Trump imposed in 2018, and it reinstates a 25% tariff on “millions of tons” of steel and aluminum imports previously exempted or excluded.
“Today I’m simplifying our tariffs on steel and aluminum,” Trump stated. “It’s 25% without exceptions or exemptions.”
Cue the negotiations. On Monday, Trump reportedly took a call from Australian Prime Minister Anthony Albanese, who is seeking a carve-out for Australian steel exports. Albanese described their conversation as “constructive and warm” but did not want to “speak on [Trump’s] behalf.”
The EU said it would respond with “firm and proportionate countermeasures.” Prime Minister Justin Trudeau said Tuesday that the tariffs were “entirely unjustified” and “unacceptable,” noting that Canada – the US’ biggest source of aluminum and one of its top sources of steel – would respond if necessary but will try to work with the US administration to avoid them. Mexican President Claudia Sheinbaum, who has also threatened countermeasures in recent weeks, said her country would keep a “cool head.”
The new US tariffs are set to take effect on March 4, and Trump added that he will also consider additional tariffs on cars, pharmaceuticals, and computer chips.
Why now? Trump’s announcement came two days after the visit of Japanese Prime Minister Shigeru Ishiba, who announced that Japan would increase its US investment to $1 trillion, including a commitment from Nippon Steel to “invest heavily” in US Steel, after a $15 billion buyout was nixed last year by the Biden administration. The deal is another reflection of Trump’s plan to strengthen domestic steel production and make imports less attractive – or even necessary.
Was there a connection? “It’s certainly possible,” says Eurasia Group’s Japan Director David Boling. “But we knew steel tariffs were coming — it was only a matter of time. While Trump is proud to be Tariff Man, he could also be called the Man of Steel. Steel is his favorite industry.” We’re waiting to see whether Ishiba picks up the phone like Albanese and leverages Nippon’s investment to lift the levies.U.S. President Joe Biden, Japan's Prime Minister Fumio Kishida, Australia's Prime Minister Anthony Albanese and India's Prime Minister Narendra Modi take part in a Quad leaders summit family photo in Claymont, Delaware, U.S., September 21, 2024.
US bolsters pacific alliance amid China concerns
In his final months in office, US President Joe Biden is looking to bolster the China-wary alliance known as “The Quad,” which brings together the US, Australia, Japan, and India. This weekend he hosted Quad leaders at his home in Wilmington, Delaware.
While the White House claimed the summit targeted no specific country, a joint statement condemned “coercive and intimidating maneuvers in the South China Sea,” a clear shot at Beijing. And in a so-called “hot mic” moment, Biden commented that “China continues to behave aggressively, testing us all across the region.”
Beijing, for its part, sees the Quad as a “threat and challenge to regional peace and security.”
The Quad summit announced expanded collaboration in maritime patrols, disaster relief, cervical cancer vaccines, tech fellowships, and clean energy projects.
The Quad hasn’t always been a top priority for its members – it lapsed almost entirely between 2008 and 2017. But when asked about the future of the group following the approaching departures of both Biden and Japanese PM Fumio Kishida, Australian Prime Minister Anthony Albanese predicted the Quad will endure, while Indian Prime Minister Narendra Modi stated “The Quad is here to stay.” To underscore that, he offered to host the group’s next gathering in 2025.Signage for The University of Melbourne is seen in Melbourne, Wednesday, November 2, 2022.
Australia to cut number of foreign students
Australia this week became the latest country to take measures to restrict immigration, as the government announced a fresh cap on the number of foreign students it will admit for study at universities and vocational schools.
The measure comes amid broader, ongoing efforts to rein in immigration, which soared in recent years to help fill pandemic-related vacancies, but which has also put pressure on infrastructure and housing prices.
Next year, Australia will allow in only 275,000 foreign students. The country is currently the temporary home for nearly three times that number.
The government is aiming to bring the number of foreign students back to pre-pandemic levels, and to root out instances in which foreigners use study visas as an excuse to come to Australia for other purposes.
Currently, there are 10% more international students at Aussie state universities than there were before COVID-19. Among private vocational schools, the number is 50%.
Universities aren’t happy. Australia has historically been a major destination for foreign students, who constitute a $50 billion annual industry. They make up the second-largest economic sector for Australia after mining, according to Universities Australia, which warned Tuesday that “having fewer students here will only widen the funding gap at a time when universities need greater support.”