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After independence, Palau had a choice to choose between ROC and PRC. PRC probably had more money or power, considering the size of their land and more number of nations were having relations with PRC by then. Palau chose to have relations with ROC.

Why?

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    A specific country case of politics.stackexchange.com/questions/14142/… – Andrew Grimm Aug 9 at 12:12
  • Without focussing to much on Palau specifics, the Taiwan/China tug of war over diplomatic recognition has gone on for decades. PRC probably had more money or power may be true now, but wasn't at the start, or more exactly Taiwan outbid China to buy diplomatic recognition from poor or minor countries, often island ones. China's influence/interest, outside of Communist bloc countries was also much less than it is now. So you should look at these things not just as the world is now, but as it was starting when those deals were struck. – Italian Philosophers 4 Monica Aug 9 at 17:25
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    I'm not sure how much spelling out the abbreviations add. Those familiar with the official name of mainland China and Taiwan already know what they mean, and for those not, the long forms of the names aren't any more informative. – Acccumulation Aug 9 at 21:00
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    @Acccumulation I disagree. For a reader arriving on this question who doesn't know the abbreviations ROC and PRC, this question will be completely obscure. If the acronyms are explicited, they mind find the question and answers worth reading and they would hopefully learn something. Also, some people who know a bit of Chinese recent history but are not native English speakers might be interested by this topic but struggle to identify who is who. Also, the cost of mentioning the full names is pretty low. (I don't reverse the recent edit because this is not worth an editing battle...) – Evargalo Aug 10 at 12:12
  • After independence - what was the year? How long is that ago? – Bernhard Döbler Aug 10 at 17:59
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Older ties

Japan and the USA, both former colonial powers in Palau, have played the most important roles in Palau’s development. Taiwan started influencing Palau in the late 1970s, when it started regarding Palau as a major potential tourist attraction and investment place. Interest from Taiwanese investors started in the 1980s with Palau’s independence on the horizon, and the tourism in Palau starting to grow. In the 1990s, Taiwanese visitors have become the major part of Palau’s tourist industry. 1

Taiwan has had exchanges with Palau since 1980, signing an agricultural agreement with the island in 1984 2

Presidential inauguration

In Palau, official representatives from the PRC and unofficial representatives from Taiwan attended the presidential inauguration ceremony in January 1989. 3

Aid

With Western powers and Russians caring little about poor small countries with the end of the Cold War, the Taipei-Beijing conflict has become a new nice-little earner for the poor, the disadvantaged and the ignored. Palau Republic, a mini-island country in the South Pacific with a population of 18,000, again proves this point. Since its independence in 1994, it enjoyed benefitting from the courting from both Beijing and Taipei without even committing itself to either side - a smarter tactic than that used by the African countries. As the host of the South Pacific Forum in 1999, the government accepted US$230,100 from Taipei to cover the operational cost of the gathering, but also received luxury cars worth US$400,000 donated by Beijing for the use of the attending VIPs. Eventually, it was Taipei's more massive - massive by Palau's standards - economic and technical aid projects that made the island make up its mind and set up diplomatic relations with Taipei.

Foreign Policy of the New Taiwan: Pragmatic Diplomacy in Southeast Asia By Jie Chen

Recognition

In late December 1999, Palau extended official diplomatic recognition to Taiwan 4

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As a small, poor and new country, Palau was relatively easy for Taiwan to win over. The Guardian reports:

Palau, which was under US administration until its independence in 1994, struck up diplomatic relations with Taiwan in 1999 after a few years of what Kesolei calls “wooing” from both Beijing and Taipei. The almost 20-year friendship has been strong, with Kesolei saying “every Palauan has a story” of interaction with Taiwan, whether travelling there for a holiday, education or medical treatment.

Although China is putting heavy pressure on Palau to change policy, their current leader has expressed clear commitment to Taiwan:

Since the China ban, Remengesau has reiterated his commitment to Taiwan, telling the Nikkei Asian Review that while China was an “important partner” Palau had “more in common with Taiwan”.

A statement from his spokesperson was even more defiant, suggesting Palau would not bow to pressure: “Palau is a country of laws, it is a democracy and we make our own decisions.”

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