REPORTER: Thom Cookes
In the middle of the Pacific Ocean, scattered over 3.5 million square kilometres of water is a group of tiny coral atolls. Together, they form the island republic of Kiribati.
ANOTE TONG, KIRIBATI PRESIDENT: If you can look at the map, we're in the middle of the entire Pacific basin. In a way, I have jokingly reflected to ourselves as the black hole in the middle of the Pacific where everybody avoids any kind of contact.
For most of its quiet, 24-year history as an independent nation, Kiribati's only real business has been fishing. This country of just 80,000 people is more than 99% water. But like many of its neighbours, Kiribati has been caught in the Pacific Cold War between China and Taiwan. Both have been accused of trying to topple the Kiribati Government by bribing politicians.
ANOTE TONG: One of the former ministers had been provided funds.
REPORTER: By the Chinese Government?
ANOTE TONG: By the Chinese Government. We asked the question was he the only minister provided support by the Chinese Government? We didn't believe so.
TEBURORO TITO, FORMER KIRIBATI PRESIDENT: Taiwan was heavily involved in the last election in Kiribati by giving money to individuals, giving money to particular parties.
For China, the stakes are particularly high. It's used Kiribati to expand its spy satellite program and this is much more than a dispute between local politicians. Most people in Kiribati are crammed into South Tarawa, part of the main atoll, and it's become one of the most heavily populated pieces of land in the Pacific. Fresh water is scarce and there are few natural resources here.
ANOTE TONG: It is fisheries, this is our single largest resource. But we've had very little benefit from this very vast resource. What has happened is foreign fishing nations have come in, taken the resource and actually benefited more from it.
For this tiny nation to survive, the major problem has always been how to attract any foreign aid or investment. And while it may not have much in the way of resources, there's one valuable asset Kiribati is prepared to sell off to the highest bidder - and that's diplomatic relations. Since independence, Kiribati has had healthy relations with China, and a resident Chinese ambassador. But now, his embassy, one of the biggest buildings on Tarawa, is locked up and deserted. Kiribati has received a better offer from China's main rival, and the Chinese diplomats here have been forced to leave. Across the road, a new embassy is being built.
SAMUEL CHEN, TAIWAN AMBASSADOR: Oh yes, this is the new building for the embassy of Taiwan and it's still under construction.
Until their new embassy is finished, the Taiwanese are camping out at this local motel.
DR. ERIC SHIBUYA, US SECURITY ANALYST: The fight over diplomatic recognition between China and Taiwan is relatively inexpensive in the Pacific and it's about recognition, full recognition. It's about UN votes, it's about the island states, the four island states which do recognise Taiwan, will, on a regular basis, put up for vote Taiwan's membership into the United Nations.
Dr Eric Shibuya is an analyst at the Asia Pacific Centre for Strategic Studies, a US Defence Department think tank in Hawaii and he's been closely watching the China/Taiwan competition in the Pacific.
DR. ERIC SHIBUYA: China's ultimate end game, I think, would be to increase its status as an international power, to increase its status as an international power in the Asia Pacific and perhaps ultimately, if it does increase its military force, particularly its long range blue water navy, having relatively friendly states in the South Pacific would be something that obviously China would find attractive.
Kiribati used to be one of those friendly states. The former president, Teburoro Tito, is a strong supporter of China and is deeply embarrassed about the switch in allegiance to Taiwan.
TEBURORO TITO: In our culture, we're very ashamed of what we've done to our very good friend of Kiribati, our friend for 23 years, a friend that has done many useful things for our people, helping our people in the communities, the young people, women, the church groups, the villages and also helping the government with many of its infrastructure programs, including the airport, which was a loan of about $20 million.
This is another piece of infrastructure the Chinese built in Kiribati. These now deserted buildings used to house China's only offshore satellite tracking station. The Chinese were furious that they were forced to shut down this extremely sensitive facility. After checking with the security guard, the former president took Dateline on a guided tour of the empty station.
TEBURORO TITO: Well, the buildings behind there, I understand, they are the offices, the control rooms where they have their computers and the control systems and out here, this sheds here, they had the equipment, the tracking equipment on trolleys that they can take out in the open and then they can always push them back under the roof when they've finished with them.
This air-conditioned room was packed with computer equipment, but as soon as China learned the Taiwanese were coming, they stripped the station bare and shipped the contents back home. No cameras were ever allowed inside here while the station was operating. When China put its first man into space this October, the tracking station in Kiribati provided critical support.
Clear uncluttered skies, on the equator puts it in the perfect place to feed information to China's space program. But it's long been rumoured to have a more secretive and controversial role. In the Marshall Islands, right next door to Kiribati, is Kwajalein Atoll, where the United States military has been testing its missile defence shield. The US sees it as a crucial part of its national security, but China has been highly suspicious about the system. In the tests, ballistic missiles are fired from California at the Kwajalein Lagoon, where smaller missiles try to shoot them down.
China has frequently denied it, but the Kiribati tracking station has been rumoured to be eavesdropping on these tests.
DR. ERIC SHIBUYA: I don't think there's any question that it's location allowed it to serve the dual purpose of being part of its satellite tracking program and space program and observe the Kwajalein activities by the United States.
ANOTE TONG: We know China's space program is quite active. We know that next door to us we have the US base in Kwajalein. We know from Kwajalein they've been testing some military hardware and we are very suspiciously close to Kwajalein to really have no impact.
The role of the tracking station became a hot issue during the Kiribati elections in June. While he was campaigning to become president, Anote Tong flatly denied any plans to change the relationship with China.
ANOTE TONG (Translation): We do not see any changes in our relationship with China. An agreement on diplomatic relations has been established and we will honour that. However, we believe, we are entrusted by our people to review the previous government's agreement with China on their tracking station in Temwaiku.
But after he won the vote, the new President dropped a bombshell. He invited Taiwan to open an embassy in Kiribati.
DR. ERIC SHIBUYA: I think what you saw in Kiribati was a new government making an attempt to get financial contributions from Taiwan while at the same time maintaining a Chinese relationship because they felt that the satellite tracking station was going to be too valuable for China to give up.
ANOTE TONG: The Chinese Embassy, when we made the announcement were very upset, somewhat threatening actually, and so my Secretary of Foreign Affairs even during debate with one of the discussions asked if they were in fact threatening us because they were asking us to change this policy, correct this mistake. And so what they did eventually is actually publish a letter to the public and went around distributing it to the public. We thought this was very much against the rules and this was taken - this issue was taken up with the embassy. They did continue to distribute the paper even after that. So we asked ourselves what would China do if we did the same thing in Beijing.
The Chinese certainly played diplomatic hardball. They immediately ceased work on this $7 million sports centre and locked up the building site. They also pulled out four specialist doctors from Tarawa's main hospital. The change of allegiance from China to Taiwan prompted a rare public backlash. This protest outside Parliament was only the second in Kiribati history. The demonstrators demanded to know what deals had been done in private.
DEMONSTRATOR (Translation): It's as if we the people from Makin to Arorae, have no chance to learn about the government's plans. We need to know about them so that we can consider them. It seems that all of a sudden Kiribati has been traded in.
ANOTE TONG: There were the concerns that we were doing the wrong thing, we're not offering traditional hospitality by doing this. But in the final analysis, I believe that I had no right to deny the Cabinet the opportunity to consider it. We had no right to deny the people the opportunity to experience this potential for change.
Tonight, the President is hosting a cocktail party for Kiribati's new ally.
ANOTE TONG: We have a trade mission from Taiwan and they will arrive today. We are looking forward to some useful discussions.
Lawrence Lui is the head of the 21-member trade delegation.
LAWRENCE LUI, TAIWANESE DIPLOMAT: All private sector are so happy, so excitement because we have one more friendly country within the diplomatic recognition. At that time, our government contacted us "why do you try a diplomatic mission to visit this friendly countries."
At first, all delegates, or all members they are very hesitant to come here. Where is Kiribati? I'm sorry, if you don't mind I tell them, Kiribati is very, very good countries, very beautiful countries, we got to be there to show our respect, show our friendship to our new friend.
But while the President seems comfortable with the new Taiwanese ambassador, his predecessor remains highly suspicious.
TEBURORO TITO: When I was president, I had approaches from various Taiwanese agents or Taiwanese representatives, wanting to capture my support. So I know what I'm talking about, you know, the Taiwanese representatives that I have met were very, very serious about getting Kiribati on their side. They want to capture politicians, they want to capture those whom they believe might be the most influential people in Kiribati and to try and get them on their side.
These three Taiwanese tuna fishing managers have bailed up the Kiribati Fisheries Minister and are pitching a deal for a new processing plant.
KIRIBATI FISHERIES MINISTER: So the manufacturer in Taiwan can do same with the machinery and the bank in Taiwan pay them. And your bank here guarantee to pay back if this company in five years you can pay back, that's it. Interest free... have a think about it.
The next day, the Taiwanese delegation is taken to the sports centre the Chinese have abandoned. It looks as though the Taiwanese will step in to complete it.
REPORTER: What do you think? What are your impressions of the stadium?
TAIWANESE ARCHITECT: Yes, yes, it's quite a good project.
REPORTER: Do you think it's a lot of work to finish?
TAIWANESE ARCHITECT: Yeah, I'm not sure, not sure.
Picking up aid projects is one thing, but allegations are being made that it goes far beyond this. Both Taiwan and China have been accused of trying to bribe potential presidents and topple governments to install their own man.
TEBURORO TITO: As far as the last elections is concerned, I have my strong belief, and these are to be proven, you know, sometime in the future, that Taiwan was heavily involved in the last election in Kiribati by giving money to individuals, giving money to particular parties, to use for the electioneering in the last election.
ANOTE TONG: There was an allegation - and this actually was pulled out of the Internet and I believe it was pulled out of the Chinese newspaper - that I had been given, directly, funds and our party had been given something like over $1 million and I say quite categorically that that's not been the case.
President Tong believes that these allegations are part of an organised campaign by China to destabilise his position.
ANOTE TONG: If Kiribati is going to sever relations with Taiwan, it would require a change of government and perhaps this is what China is looking towards.
REPORTER: Are you worried about that? Do you think they might be trying to undermine your government?
ANOTE TONG: I have no doubt that they will continue to try to achieve that in order to be able to get back into Kiribati. We've confirmed, through a letter, that one of the former ministers had been provided funds...
REPORTER: By the Chinese Government?
ANOTE TONG: By the Chinese Government. We asked the question was he the only minister provided support by the Chinese Government, we didn't believe so.
TEBURORO TITO: There has been allegation from the other side that China may have assisted my party in winning elections and if that is the perception, if that is to say that China has helped some of my ministers or some of my party members to fund particular projects in the village, a water project, or a solar project, fine, I take that, I accept that, but I don't see that as interfering.
The Chinese Government declined interview requests by Dateline and offered only a written statement. Ironically, it claims that Kiribati's recognition of Taiwan is a gross interference in China's internal affairs. The Taiwanese ambassador to Kiribati also denied that Taiwan had been trying to buy it's way into the country.
SAMUEL CHEN: We are very happy to make the relation... build up the relation with Kiribati and based on our common value of democracy, common interests and it's nothing to do with so-called cheque diplomacy.
But it's not just China and Taiwan that the new President has to worry about. He now has Australia breathing down his neck as a result of the delegation to recognise Taiwan.
ANOTE TONG: And I have had formal representations from the Australian Government to say that we should reconsider the entire policy. I suspect Australia has its own agenda with China so maybe we upset that and we were doing things that we were not supposed to have done.
As a few commentators in Kiribati have said, if you choose to dance with elephants, occasionally you can be stood on.
TEBURORO TITO: I think what we are doing now, currently, is just increasing the China/Taiwan tension, and a little bit of the Cold War tension. I think we are in fact contributing to that tension by what we're doing now in Kiribati.
DR. ERIC SHIBUYA: Australia, like the United States, should pay attention, should see which states are changing, which administrations are switching recognition and why, what's the play going on.
For the regional superpower, Kiribati is not much more than a pawn in the conflict being played out across the Pacific. But the current president is trying to make the best of the hand he's been dealt and, for now, that means cutting a deal with Taiwan.
ANOTE TONG: We don't have the base, the economic basis to attract foreign investment, so this is why we need to establish this. If without being able to do this, our future as a nation is totally in question.
In the middle of the Pacific Ocean, scattered over 3.5 million square kilometres of water is a group of tiny coral atolls. Together, they form the island republic of Kiribati.
ANOTE TONG, KIRIBATI PRESIDENT: If you can look at the map, we're in the middle of the entire Pacific basin. In a way, I have jokingly reflected to ourselves as the black hole in the middle of the Pacific where everybody avoids any kind of contact.
For most of its quiet, 24-year history as an independent nation, Kiribati's only real business has been fishing. This country of just 80,000 people is more than 99% water. But like many of its neighbours, Kiribati has been caught in the Pacific Cold War between China and Taiwan. Both have been accused of trying to topple the Kiribati Government by bribing politicians.
ANOTE TONG: One of the former ministers had been provided funds.
REPORTER: By the Chinese Government?
ANOTE TONG: By the Chinese Government. We asked the question was he the only minister provided support by the Chinese Government? We didn't believe so.
TEBURORO TITO, FORMER KIRIBATI PRESIDENT: Taiwan was heavily involved in the last election in Kiribati by giving money to individuals, giving money to particular parties.
For China, the stakes are particularly high. It's used Kiribati to expand its spy satellite program and this is much more than a dispute between local politicians. Most people in Kiribati are crammed into South Tarawa, part of the main atoll, and it's become one of the most heavily populated pieces of land in the Pacific. Fresh water is scarce and there are few natural resources here.
ANOTE TONG: It is fisheries, this is our single largest resource. But we've had very little benefit from this very vast resource. What has happened is foreign fishing nations have come in, taken the resource and actually benefited more from it.
For this tiny nation to survive, the major problem has always been how to attract any foreign aid or investment. And while it may not have much in the way of resources, there's one valuable asset Kiribati is prepared to sell off to the highest bidder - and that's diplomatic relations. Since independence, Kiribati has had healthy relations with China, and a resident Chinese ambassador. But now, his embassy, one of the biggest buildings on Tarawa, is locked up and deserted. Kiribati has received a better offer from China's main rival, and the Chinese diplomats here have been forced to leave. Across the road, a new embassy is being built.
SAMUEL CHEN, TAIWAN AMBASSADOR: Oh yes, this is the new building for the embassy of Taiwan and it's still under construction.
Until their new embassy is finished, the Taiwanese are camping out at this local motel.
DR. ERIC SHIBUYA, US SECURITY ANALYST: The fight over diplomatic recognition between China and Taiwan is relatively inexpensive in the Pacific and it's about recognition, full recognition. It's about UN votes, it's about the island states, the four island states which do recognise Taiwan, will, on a regular basis, put up for vote Taiwan's membership into the United Nations.
Dr Eric Shibuya is an analyst at the Asia Pacific Centre for Strategic Studies, a US Defence Department think tank in Hawaii and he's been closely watching the China/Taiwan competition in the Pacific.
DR. ERIC SHIBUYA: China's ultimate end game, I think, would be to increase its status as an international power, to increase its status as an international power in the Asia Pacific and perhaps ultimately, if it does increase its military force, particularly its long range blue water navy, having relatively friendly states in the South Pacific would be something that obviously China would find attractive.
Kiribati used to be one of those friendly states. The former president, Teburoro Tito, is a strong supporter of China and is deeply embarrassed about the switch in allegiance to Taiwan.
TEBURORO TITO: In our culture, we're very ashamed of what we've done to our very good friend of Kiribati, our friend for 23 years, a friend that has done many useful things for our people, helping our people in the communities, the young people, women, the church groups, the villages and also helping the government with many of its infrastructure programs, including the airport, which was a loan of about $20 million.
This is another piece of infrastructure the Chinese built in Kiribati. These now deserted buildings used to house China's only offshore satellite tracking station. The Chinese were furious that they were forced to shut down this extremely sensitive facility. After checking with the security guard, the former president took Dateline on a guided tour of the empty station.
TEBURORO TITO: Well, the buildings behind there, I understand, they are the offices, the control rooms where they have their computers and the control systems and out here, this sheds here, they had the equipment, the tracking equipment on trolleys that they can take out in the open and then they can always push them back under the roof when they've finished with them.
This air-conditioned room was packed with computer equipment, but as soon as China learned the Taiwanese were coming, they stripped the station bare and shipped the contents back home. No cameras were ever allowed inside here while the station was operating. When China put its first man into space this October, the tracking station in Kiribati provided critical support.
Clear uncluttered skies, on the equator puts it in the perfect place to feed information to China's space program. But it's long been rumoured to have a more secretive and controversial role. In the Marshall Islands, right next door to Kiribati, is Kwajalein Atoll, where the United States military has been testing its missile defence shield. The US sees it as a crucial part of its national security, but China has been highly suspicious about the system. In the tests, ballistic missiles are fired from California at the Kwajalein Lagoon, where smaller missiles try to shoot them down.
China has frequently denied it, but the Kiribati tracking station has been rumoured to be eavesdropping on these tests.
DR. ERIC SHIBUYA: I don't think there's any question that it's location allowed it to serve the dual purpose of being part of its satellite tracking program and space program and observe the Kwajalein activities by the United States.
ANOTE TONG: We know China's space program is quite active. We know that next door to us we have the US base in Kwajalein. We know from Kwajalein they've been testing some military hardware and we are very suspiciously close to Kwajalein to really have no impact.
The role of the tracking station became a hot issue during the Kiribati elections in June. While he was campaigning to become president, Anote Tong flatly denied any plans to change the relationship with China.
ANOTE TONG (Translation): We do not see any changes in our relationship with China. An agreement on diplomatic relations has been established and we will honour that. However, we believe, we are entrusted by our people to review the previous government's agreement with China on their tracking station in Temwaiku.
But after he won the vote, the new President dropped a bombshell. He invited Taiwan to open an embassy in Kiribati.
DR. ERIC SHIBUYA: I think what you saw in Kiribati was a new government making an attempt to get financial contributions from Taiwan while at the same time maintaining a Chinese relationship because they felt that the satellite tracking station was going to be too valuable for China to give up.
ANOTE TONG: The Chinese Embassy, when we made the announcement were very upset, somewhat threatening actually, and so my Secretary of Foreign Affairs even during debate with one of the discussions asked if they were in fact threatening us because they were asking us to change this policy, correct this mistake. And so what they did eventually is actually publish a letter to the public and went around distributing it to the public. We thought this was very much against the rules and this was taken - this issue was taken up with the embassy. They did continue to distribute the paper even after that. So we asked ourselves what would China do if we did the same thing in Beijing.
The Chinese certainly played diplomatic hardball. They immediately ceased work on this $7 million sports centre and locked up the building site. They also pulled out four specialist doctors from Tarawa's main hospital. The change of allegiance from China to Taiwan prompted a rare public backlash. This protest outside Parliament was only the second in Kiribati history. The demonstrators demanded to know what deals had been done in private.
DEMONSTRATOR (Translation): It's as if we the people from Makin to Arorae, have no chance to learn about the government's plans. We need to know about them so that we can consider them. It seems that all of a sudden Kiribati has been traded in.
ANOTE TONG: There were the concerns that we were doing the wrong thing, we're not offering traditional hospitality by doing this. But in the final analysis, I believe that I had no right to deny the Cabinet the opportunity to consider it. We had no right to deny the people the opportunity to experience this potential for change.
Tonight, the President is hosting a cocktail party for Kiribati's new ally.
ANOTE TONG: We have a trade mission from Taiwan and they will arrive today. We are looking forward to some useful discussions.
Lawrence Lui is the head of the 21-member trade delegation.
LAWRENCE LUI, TAIWANESE DIPLOMAT: All private sector are so happy, so excitement because we have one more friendly country within the diplomatic recognition. At that time, our government contacted us "why do you try a diplomatic mission to visit this friendly countries."
At first, all delegates, or all members they are very hesitant to come here. Where is Kiribati? I'm sorry, if you don't mind I tell them, Kiribati is very, very good countries, very beautiful countries, we got to be there to show our respect, show our friendship to our new friend.
But while the President seems comfortable with the new Taiwanese ambassador, his predecessor remains highly suspicious.
TEBURORO TITO: When I was president, I had approaches from various Taiwanese agents or Taiwanese representatives, wanting to capture my support. So I know what I'm talking about, you know, the Taiwanese representatives that I have met were very, very serious about getting Kiribati on their side. They want to capture politicians, they want to capture those whom they believe might be the most influential people in Kiribati and to try and get them on their side.
These three Taiwanese tuna fishing managers have bailed up the Kiribati Fisheries Minister and are pitching a deal for a new processing plant.
KIRIBATI FISHERIES MINISTER: So the manufacturer in Taiwan can do same with the machinery and the bank in Taiwan pay them. And your bank here guarantee to pay back if this company in five years you can pay back, that's it. Interest free... have a think about it.
The next day, the Taiwanese delegation is taken to the sports centre the Chinese have abandoned. It looks as though the Taiwanese will step in to complete it.
REPORTER: What do you think? What are your impressions of the stadium?
TAIWANESE ARCHITECT: Yes, yes, it's quite a good project.
REPORTER: Do you think it's a lot of work to finish?
TAIWANESE ARCHITECT: Yeah, I'm not sure, not sure.
Picking up aid projects is one thing, but allegations are being made that it goes far beyond this. Both Taiwan and China have been accused of trying to bribe potential presidents and topple governments to install their own man.
TEBURORO TITO: As far as the last elections is concerned, I have my strong belief, and these are to be proven, you know, sometime in the future, that Taiwan was heavily involved in the last election in Kiribati by giving money to individuals, giving money to particular parties, to use for the electioneering in the last election.
ANOTE TONG: There was an allegation - and this actually was pulled out of the Internet and I believe it was pulled out of the Chinese newspaper - that I had been given, directly, funds and our party had been given something like over $1 million and I say quite categorically that that's not been the case.
President Tong believes that these allegations are part of an organised campaign by China to destabilise his position.
ANOTE TONG: If Kiribati is going to sever relations with Taiwan, it would require a change of government and perhaps this is what China is looking towards.
REPORTER: Are you worried about that? Do you think they might be trying to undermine your government?
ANOTE TONG: I have no doubt that they will continue to try to achieve that in order to be able to get back into Kiribati. We've confirmed, through a letter, that one of the former ministers had been provided funds...
REPORTER: By the Chinese Government?
ANOTE TONG: By the Chinese Government. We asked the question was he the only minister provided support by the Chinese Government, we didn't believe so.
TEBURORO TITO: There has been allegation from the other side that China may have assisted my party in winning elections and if that is the perception, if that is to say that China has helped some of my ministers or some of my party members to fund particular projects in the village, a water project, or a solar project, fine, I take that, I accept that, but I don't see that as interfering.
The Chinese Government declined interview requests by Dateline and offered only a written statement. Ironically, it claims that Kiribati's recognition of Taiwan is a gross interference in China's internal affairs. The Taiwanese ambassador to Kiribati also denied that Taiwan had been trying to buy it's way into the country.
SAMUEL CHEN: We are very happy to make the relation... build up the relation with Kiribati and based on our common value of democracy, common interests and it's nothing to do with so-called cheque diplomacy.
But it's not just China and Taiwan that the new President has to worry about. He now has Australia breathing down his neck as a result of the delegation to recognise Taiwan.
ANOTE TONG: And I have had formal representations from the Australian Government to say that we should reconsider the entire policy. I suspect Australia has its own agenda with China so maybe we upset that and we were doing things that we were not supposed to have done.
As a few commentators in Kiribati have said, if you choose to dance with elephants, occasionally you can be stood on.
TEBURORO TITO: I think what we are doing now, currently, is just increasing the China/Taiwan tension, and a little bit of the Cold War tension. I think we are in fact contributing to that tension by what we're doing now in Kiribati.
DR. ERIC SHIBUYA: Australia, like the United States, should pay attention, should see which states are changing, which administrations are switching recognition and why, what's the play going on.
For the regional superpower, Kiribati is not much more than a pawn in the conflict being played out across the Pacific. But the current president is trying to make the best of the hand he's been dealt and, for now, that means cutting a deal with Taiwan.
ANOTE TONG: We don't have the base, the economic basis to attract foreign investment, so this is why we need to establish this. If without being able to do this, our future as a nation is totally in question.