Palacios: CNMI to pivot from its reliance on China market

Gov. Arnold Palacios has expressed his intent to pivot the CNMI away from its reliance on the Chinese tourism market, in a nod to the increasing geopolitical tension between the United States and China.

In a letter to Adm. John Aquillino, commander of the U.S. Indo-Pacific Command, Palacios said his administration is committed to advancing U.S national interests in the Pacific region, which includes pivoting away from the CNMI’s reliance on its Chinese tourism market.

“My administration is very much committed to the U.S national interests in our region and will do what we can to advance these interests as geopolitical tensions continue to heighten. Part of this commitment includes the CNMI’s pivot away from its reliance on the Chinese tourism market, which comprised more than 50% of our tourism base (about 200,000 visitors pre-pandemic),” he said.

In place of the Chinese market, Palacios says his administration is working on strengthening and further developing the tourism pipelines from American allies like Japan and South Korea.

“This will take time. The loss of the Chinese market has had considerably adverse economic and financial impact on the Commonwealth. This loss, which represents a sizable portion of our tourism revenue, contributes to vulnerable economic conditions that in the past have been exploited by the Chinese Communist Party to the detriment of the United States’ interest in the region,” said Palacios.

Because of the anticipated loss in revenue, Palacios is seeking the Indo-Pacific Command’s help in advocating for additional support in the form of funding to stabilize the CNMI community as it commits to turning away from one of its biggest tourism markets.

“Because the CNMI’s economic stability and sustainability is directly tied to the strategic posture and military might of the U.S. in the Indo-Pacific region, we are formally seeking your advocacy for additional funding support to stabilize our economy as you testify before the U.S. Congress about the [Department of Defense]’s budget. Specifically, we request for your support in seeking direct aid to replace the economic loss that we have experienced as a result of the CNMI’s pivot away from China,” he said.

Right now, the CNMI’s tourism sector is dominated by Korea, China, and Japan, with just a sprinkling from other destinations. The COVID-19 pandemic resulted in a massive drop in visitors from these markets. It has only been lately that both the Korean and Japanese markets have started trickling back in.

Recently, the United States lifted the testing requirement for visitors from China, which in turn has increased prospects for the CNMI’s tourism industry with its largest market, China, showing an interest in returning to the CNMI sometime in May.

As of last week, Commonwealth Port Authority board chair Kimberlyn King-Hinds said that CPA has already received inquiries from Chinese airlines interested in returning to Saipan.

“Yes, we have received inquiry from the China market. Beijing Capital has [already] reached out to CPA expressing an interest to resume services sometime in May,” she said.