Pacific island nations are seeking to balance emerging economic opportunities against the risks of being caught in the crossfire of U.S.-China rivalry, as geopolitical competition intensifies in the region.

Ministers and representatives from 16 Pacific nations and regions on Sunday and Monday met with Japanese Foreign Minister Yoko Kamikawa to set the agenda for the Pacific Islands Leaders Meeting (PALM) in July.

Following the meetings, Kamikawa said they discussed regional security, among other topics. “We affirmed with our Pacific Island partners that we are opposed to any attempt to change the status quo,” she said.

Beijing has been keen to extend its reach in the region. A security deal between China and the Solomon Islands last year caused alarm in the U.S. and Australia, which have traditionally considered the region to be within their sphere of influence.

Papua New Guinea drew attention recently when it emerged that the government had been approached by Beijing to discuss a potential policing pact that could include training and the provision of equipment and surveillance technology. The Pacific nation had inked a cooperation agreement with Washington last May, giving American forces access to its ports and airports.

Speaking to Nikkei Asia on the sidelines of the meeting, Foreign Minister Justin Tkatchenko sought to strike a balance, saying China was an important economic and trade partner but the country would “always keep” with its “traditional security partners” including Australia and the U.S.

“It’s not just Papua New Guinea, every Pacific island country has been given the same option, the same [offer of] assistance,” Tkatchenko said. “At this stage I want to make it very clear: There is no security agreement for policing at all with China. It’s not happening.”

He added, “We follow the ‘one China’ policy … For trade, they’re [our] second biggest and we don’t want to destroy that and we want to continue to enhance that with China.”

Papua New Guinea and other small nations in the Pacific now want allies’ words and commitments to turn into action, Tkatchenko said. He said plans to integrate 50 police officers from Australia and Commonwealth countries into the nation’s police force are moving forward, with the roles already advertised.

Under its agreement with Washington, American forces will help to expand capacity in Papua New Guinea’s army, provide infrastructure and boost the country’s humanitarian response capabilities. Implementation was “still in progress,” Tkatchenko said.

The country wants to boost its agricultural export sector by meeting Australian and U.S. biosecurity standards but is also studying a free trade agreement with China. “China has opened its doors to PNG and we can be one of the biggest food bowls in the Pacific,” Tkatchenko said.

Other key U.S. defense partners in the Pacific are waiting for further support. Palau, the Federated States of Micronesia and the Marshall Islands are members of the Compacts of Free Association (COFA) whose decades-old arrangements with the U.S. are meant to bring economic assistance in exchange for granting the American military certain rights.

One of those rights allows the U.S. to deny military access to a third country. While the agreements were renewed last year, funding for them has yet to pass Congress amid broader disagreements between Democrats and Republicans about the bill to which it was attached.

The U.S. is planning to install advanced radar systems in Palau in 2026, while the Marshall Islands hosts major U.S. missile test sites.

Palau Minister of State Gustav Aitaro said he was worried the U.S. election in November would mean further delays in approving the funds. The current funding agreement is set to expire in September.

“When we signed on the compact, the [U.S.] military were given rights for our national security and also to establish bases in the future,” Aitaro told Nikkei.

He added that if any more delays cause ramifications, “we might have to review” the arrangements.

Aitaro said any escalation in tensions between the U.S. and China would have a huge impact on the remote archipelago nation, which has asked Washington to deploy Patriot missiles, given that hosting the radar facility would make Palau a target.

As a small country already struggling with inflation and rebuilding its tourism sector following the pandemic, he said, “geopolitics has a huge impact.”

Despite the delay causing economic concerns, Aitaro said he hoped the increased focus on the region could bring further support. He said the country had requested U.S. support to study whether its main runway could be extended to accommodate larger flights to boost tourism. It was also seeking help to relocate a seaside hospital facing the threat of rising sea levels due to climate change.

Lorin Robert, secretary of foreign affairs for the Federated States of Micronesia, said the country had rebuffed overtures from China about law enforcement cooperation but was worried Beijing would take advantage of the U.S. delay.

“I know that the Chinese are not asleep, they know what is going on,” Robert said. “I’m afraid that they might use that occasion, might take advantage of that delay.”

Robert said he had explained to China that Micronesia had close security and defense ties with the U.S.

“We said thanks but no thanks,” he said. “Sometimes they know our answers, right? They just want to ask for it just for externalizing the feelings that they have.”