Although the Northern Mariana Islands have always had a complex relationship with China, differing political approaches to China have become a more divisive and central point in the commonwealth.
Chinese tourism has long played a central role in the Northern Marianas’ economy, amounting to half of the tourism industry before the COVID-19 pandemic. Since then, politicians have sought to decrease reliance on China, viewing it as a risky dependence should US-China relations spiral. That coalition is led by CNMI Governor Arnold Palacios (I), who worked with the military last year hoping to secure funding that would allow the Northern Mariana Islands to wean itself off its Chinese reliance. This year, Palacios re-emphasized his concerns about the “instability of the mainland Chinese tourism market, especially in light of geopolitical tensions in our region and economic conditions in China.” He added that “the CCP… presents an increasing threat to national security and peace in our region.”
These objections have translated into action. Governor Palacios has supported visa-free travel between the Philippines, Guam, and the Northern Mariana Islands as part of a broader campaign to diversify the commonwealth’s tourist streams. At the 26th Micronesian Islands forum, hosted in Guam in early June, Governor Palacios said that Chinese volatility and aggression were a topic of discussion.
Yet Palacios’ national security-oriented argument is only one side of the story. The Northern Mariana Islands are on the brink of an economic crisis. According to new census data, economy-wide revenue in 2022 was just half of what it was in 2017, and employment is only two-thirds of its 2017 levels. Projections from the Saipan Chamber of Commerce suggested that the Northern Mariana Islands will see just about half of the tourists necessary for the islands to “stay afloat” economically. And in February, Governor Palacios warned that the commonwealth was headed for a “severe economic crisis” with “limited prospects for recovery.” It is in the context of this impending economic disaster that Senate President Edith Guerrero has argued that the commonwealth is in no position to be divesting away from any tourism. While “diversification in the CNMI is very important,” she told interviewers, “we need much more robust numbers coming in… we all know what we need is airlines and we need tourists. It doesn’t matter what country they come from, as long as they’re allowed to enter the United States, I think we should be embracing that.”
At its essence, the debate over Chinese tourism is one of short-term and long-term priorities. In the long term, politicians agree that reliance on Chinese tourists is risky and unsustainable should geopolitical winds turn. Delaying diversification could make for a larger crash if the Chinese market suddenly becomes unviable. At the same time, diversifying now guarantees economic hardship in the short term as the tourist industry dries up. The Northern Mariana Islands are left with a lose-lose decision, choosing between a guaranteed crisis in the short term or the potential of an even more devastating one in the long term.
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