Nauru asked for cash help, Taiwan says

Taiwan says Nauru requested economic aid before its diplomatic switch to recognise China to cover the gap left by the mothballing of Australia’s immigration processing facility.

Pacific Minister Pat Conroy says the government learned of Nauru’s impending diplomatic switch before it was announced.

Taiwan says Nauru requested a large amount of economic aid ­before its diplomatic switch to recognise China to cover the ­financial gap left by the mothballing of Australia’s offshore immigration processing facility.

Taiwan’s Deputy Foreign Minister, Tien Chung-kwang, revealed the request as Australia’s Pacific Minister Pat Conroy said the government learned of Nauru’s impending diplomatic switch before it was announced.

Mr Conroy said on Tuesday that Nauru had given Australia “a heads-up that a decision had been made”, but he said the Pacific ­microstate didn’t ask for additional funds to prevent the ­diplomatic switch.

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

Security experts and the ­opposition have urged the Albanese government to reveal what interactions it had with the island nation before the decision was made, warning Australia needed to work harder to stamp out China’s cashbook diplomacy in the Pacific.

Mr Tien confirmed Nauru had asked Taipei for a substantial economic aid package, reported to be worth $125m, to cover the funding shortfall following Australia’s suspension of offshore processing.

He said Beijing had engaged in an “ambush” and suggested the Chinese government had agreed to Nauru’s request.

Mr Tien said Nauru had also sought funding to deal with the upcoming departure of Australia’s Bendigo Bank – the island’s only financial institution – in ­December 2024.

The Australian government said at the time that it would support Nauru to find alternative providers of banking services.

Nauru’s surprise diplomatic shift came just two days after Taiwan’s Democratic Progressive Party retained the presidency in national elections in a rebuff to China.

It leaves Taiwan with just 12 countries that recognise it diplomatically, including just three in the Pacific – Tuvalu, Palau and the Republic of the Marshall ­Islands.

Mr Conroy said Australia had improved its relationships with Pacific nations under the Albanese government, pointing to the landmark bilateral treaty between Australia and Tuvalu, and the recent Australia-Papua New Guinea security agreement.

He said the majority of Pacific Island Forum member states – including Australia – had diplomatic relations with China, “and we’ve got excellent relations with every Pacific island nation”.

The US said Nauru’s decision was “a disappointing one”, and warned China’s promises of financial aid might not eventuate.

“The PRC often makes promises in exchange for diplomatic relations that ultimately remain unfulfilled,” the US State Department said.

A spokeswoman for China’s Foreign Ministry refused to say how much money Beijing had agreed to give Nauru.

“As a sovereign country, the Republic of Nauru independently made the right choice,” spokeswoman Mao Ning said.

China’s propaganda outlet, The Global Times, editorialised Nauru’s decision was a “slap in the face to some ill-intentioned moves made by very few US-led Western countries aiming to turn the Taiwan question into an international topic and to continue playing ‘the Taiwan card’ in containing the Chinese mainland”.

Strategic Analysis Australia director Michael Shoebridge said the change was a strategic blow for Australia that left Nauru vulnerable to Chinese coercion.

He urged the Albanese government to establish a wide-ranging treaty with Nauru – similar to the Australia-Tuvalu Falepili Union. “The main question is what level of negotiation is going on with Nauru to make sure the country is in a sustainable economic future that removes it from being aid-dependent on Chinese cash or offshore processing,” Mr Shoebridge said.

Lowy Institute Pacific Island program director Meg Keen said Australia’s shift from offshore refugee processing “resulted in a large financial shortfall for Nauru that it was looking to fill”.

Professor Keen warned Australia must now shore up its relationship with Nauru to ensure the change in recognition “does not create strategic surprises”.

“China clearly made an attractive offer beyond what Taiwan was willing to give,” Professor Keen said.