Palacios: We’re over-reliant on China

Gov. Arnold I. Palacios says his position on China has not changed and he still wants the CNMI to pivot away from its over-reliance on the China market, but that doesn’t mean he is against Chinese tourists visiting the islands.

Speaking with reporters after MVA’s annual general membership meeting yesterday at the Crowne Plaza Resort Saipan, Palacios said he believes the CNMI is over-reliant on the China market.

“We were over-reliant on the market. I’m not saying we aren’t welcoming them, I never said that. We’re just going to pivot away from that, given the reality of the geopolitical [situation] and the politics within our federal government as well as China,” he said.

Addressing Chinese President Xi Jinping’s visit to the United States and his meeting with President Joe Biden, Palacios said the federal government hasn’t really made its position with China clear.

“The President of China recently went to the United States to meet with President Biden but what has happened with that. What is the real federal position on this situation? We’ve got to remember that Chinese tourists travel to the States and around the world, but they need to get a visa. We have a unique visa but that is very tenuous. I keep saying that that is a very tenuous visa that can be recalled at the discretion of the secretary of Homeland Security,” he said.

Because the CNMI’s visa waiver program including China could be recalled at any time by the federal government, Palacios said its best for the CNMI to stay out of its radar to avoid a complete collapse of the China market.

Chinese tourists are able to enter the CNMI via a limited visa waiver program that was granted the CNMI by DHS. Visa waivers are usually granted on a case-by-case basis and at the discretion of DHS.

Palacios said the CNMI needs to be aware and mindful of what’s going on in this region of the world.

“We are a small U.S. territory, very dependent on the China market (which was about 50% of our market). If that collapses, then we still have problems. I’ve been warning that we shouldn’t even be talking too much about this market because the more we talk about it, there’s also that potential of putting us on the radar. We hope things ease up with our federal government and China and that their relationship gets back to normal pre-COVID, but until such time, we’re very vulnerable. It’s a federal policy that can completely pull our visa,” he said.

All that the CNMI can do, Palacios said, is to continue to get new markets to come to the CNMI.

“We are not positioning ourselves to make Korea our No. 1 market but it is what it is. We’re trying to get other markets and get the Japan market going. Chinese tourists are still able to come in. In fact, Hong Kong is a visa-free market and Hong Kong Airlines has expressed interest and that is good,” he said.

During a presentation by MVA’s Japan partners in yesterday’s meeting, it was learned that more Chinese tourists than Japanese tourists have been flying to Saipan from Japan in the past few months.

Private sector stakeholders in the CNMI have been pushing to have the CNMI exempted from the U.S. Department of Transportation’s China Order Part 213, which essentially caps the number of flights from China to the entire United States, including territories.

Currently the cap is 24 outbound flights from China to the U.S. per month. This means the CNMI is currently competing with destinations like Los Angeles, other mainland states, and Hawaii.

Gov. Arnold I. Palacios