Taiwan says Australian detention centre funding led Nauru to officially recognise China

The federal government is being urged to move quickly to strike a Tuvalu-style security pact with Nauru after the tiny island nation switched diplomatic recognition from Taiwan to China in a shock move signalling deeper ties with Beijing.

Pat Conroy, the Minister for the Pacific, said Nauru notified the government in advance about the announcement, which Taiwan linked to a funding shortfall related to Australia’s offshore immigration detention facility on Nauru.

Asylum seekers at the Nauru immigration detention centre. Credit: Angela Wylie

Taiwan’s Central News Agency reported on Tuesday that Nauru had asked Taiwan for $125 million to “cover a financial shortfall left by the temporary closure” of the immigration detention centre.

Taiwan’s Foreign Ministry laid the blame on the Australian-run detention centre for the rupture in diplomatic ties, but the Australian government rejected those claims and insisted that the centre has not closed and that funding arrangements with Nauru remained in place.

China has spent decades pursuing Taiwan’s diplomatic partners by offering economic development promises. The Chinese government claims its neighbour as part of its territory despite the Chinese Communist Party never ruling the democratic island.

The Biden administration expressed dismay about Nauru’s decision, which came just days after Taiwanese Democratic Progressive Party candidate Lai Ching-te angered Beijing by winning Taiwan’s presidential election.

The detention centre in Nauru. Credit: AP

While the decision brings Nauru in line with the international mainstream on maintaining official ties with China, policymakers in Canberra will be alarmed about the move’s broader implications for the increasingly fierce geostrategic competition in the Pacific.

Solomon Islands switched diplomatic recognition from Taiwan to China in 2019 and just three years later signed a wide-ranging security agreement with China that sparked fears about a possible Chinese base in the country.

Department of Home Affairs officials said last year that maintaining offshore processing facilities on Nauru would cost at least $350 million annually, even if no asylum seekers were being held at the processing centre.

This was down from a cost of $485 million with 22 asylum seekers being held at the centre, a discrepancy that could help explain the Nauruan government’s claims of a funding shortfall.

A spokesperson for the Minister for Home Affairs Clare O’Neil said the Nauru offshore processing facility remained open.

“Funding arrangements for the management of that facility have not changed,” the spokesperson said.

The last asylum seeker held on Nauru was removed last June, but Australia sent a group of asylum seekers to the island in September after they tried to reach Australia by boat.

Conroy, the Minister for the Pacific, said: “I can be very clear that we were aware in advance of the announcement.”

While Australia had been given “a heads-up that a decision had been made”, Conroy said Nauru did not seek additional funds to prevent the diplomatic switch.

“This was a decision by the sovereign government of Nauru and we respect their decision,” Conroy said.

Anthony Bergin, an expert associate at the Australian National University’s National Security College, said Nauru’s diplomatic switch was a “bloody big win for China”.

“Australia would be mad not to try to strike a similar deal to the Australia-Tuvalu Falepili Union with Nauru to try to alleviate any security concerns about the move,” Bergin said. “We should be moving with rapid speed to try to get a version of that with Nauru.”

The landmark treaty, announced in November, gives Australia effective veto power over any possible security pact between China and Tuvalu in exchange for creating a special visa pathway for the Pacific nation’s residents to escape the threat of climate change.

With a population of around 11,000 people and a land mass of 21 square kilometres, Nauru is one of the smallest nations in the world and is regarded as highly vulnerable to climate change.

Taiwan’s Deputy Foreign Minister Tien Chung-kwang described the move as a “despicable act by China” and accused Beijing of launching an “assault on democracy and a challenge to international norms”.

Nauru’s President David Adeang said on Monday the switch was in the best interests of the Nauruan economy.

Nauru President David Adeang made the announcement on Monday afternoon.

Opposition foreign affairs spokesman Simon Birmingham called for the government to detail its interactions with Nauru ahead of the diplomatic switch.

“If, as reports suggest, issues around funding attached to the Australian immigration detention facility were a key factor, it is important that the Albanese government be transparent about any discussions it had on that issue with officials from Nauru and its knowledge of any payments sought or made by China to Nauru,” Birmingham said.

“Whilst it is a decision entirely for Nauru whether it officially recognises Taiwan or not, it is relevant to Australia’s security interests in the Pacific and warrants appropriate disclosure from the Albanese government.”

Nauru is the 10th diplomatic ally lost by Taiwan since President Tsai Ing-wen was elected in 2016 after she campaigned heavily on resisting Chinese influence on the democratic island.

On Monday night, the Maldives joined Nauru, Nepal, Russia and Kazakhstan in verbatim repeating claims from China’s Foreign Ministry that “Taiwan is an inalienable part of China’s territory.”

“The Maldives opposes any statement or action that undermines China’s sovereignty and territorial integrity, opposes all ‘Taiwan independence’ separatist activities, and will not develop any form of official relations with Taiwan,” the Maldivian government said in a statement.

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