Even in a region with a significant economic reliance on the tourism industry, the Northern Mariana Islands have long been a bastion for Chinese visitors. The islands draw so many Chinese tourists primarily because they are the only US territory that Chinese citizens can travel to without a visa, and as in the rest of the country, all children born on American soil are naturalized citizens. In some years, birth tourism outnumbered indigenous births. The tourist industry goes beyond that narrow niche: before the coronavirus pandemic, tourism accounted for over 70% of the commonwealth’s economy, and Chinese visitors were the largest tourist base (accounting for about half of tourism).
But that relationship is rapidly changing. In light of increasingly volatile bilateral relations between the United States and China, Governor Arnold Palacios (I) has sought to move away from the Commonwealth’s dependence on Chinese tourism. The governor said that hinging the Northern Mariana Islands’ economy on an industry that could evaporate overnight, should US-China relations deteriorate, was risky. To that end, the governor wrote in March to John Aquilino, the US Admiral of the Indo-Pacific region, committing to advancing American geopolitical interests and requesting financial support to fill the void a loss of Chinese tourism would create.
The Commonwealth has taken a number of actions to shift away from the Chinese market. Part of these efforts has been developing relationships with other countries to sustain the tourism industry. In June, Governor Palacios and members of the Marianas Visitor Authority met with Korean airlines, travel agencies, and government officials to bolster the presence of Korean tourism on the islands. The governor also traveled to Japan and met with tourism officials and the Minister of Defense to concretize another stable tourist market.
Yet the shift away from Chinese tourism has been challenged and contradicted. In spite of Governor Palacios’ efforts, a number of Chinese airlines wrote to the commonwealth expressing their intention to continue routes to the Northern Mariana Islands, and in August, Chinese tourism increased by over twenty-fold compared to the prior month. What’s more, in opposition to the governor’s position on Chinese tourism, US Department of Commerce Secretary Gina Raimondo celebrated the return of the Chinese markets, arguing the tourism industry will be “crucial for our bilateral relationship.” Governor Palacios, however, remained steadfast in rejecting a reliance on the Chinese market.
The conundrum the governor faces today will not become easier in the coming years. Should US-China relations remain stable enough to support tourism, the decision to snub the Chinese market will cost the Northern Mariana Islands economy dearly. But should the governor choose to continue the status quo of relying on Chinese tourists, any deterioration of US-China relations will leave a devastating vacuum in the commonwealth’s income. Right now, the Northern Mariana Islands stand at the crossroads of a difficult decision, and whether they will persist in their course of diversifying their economy or stay reliant on China remains to be seen.