KOROR, Palau, March 21, 2025 (Island Times) — A U.S.-funded study has warned that Chinese-linked criminal enterprises are actively investing in Palau, posing potential risks to the country’s security and sovereignty. The report, first published by Benar News, alleges that investments tied to Cambodia-based Prince Group could serve as a conduit for illicit activities and foreign influence.
The warning, presented to Palau’s President Surangel Whipps Jr. and Taiwan’s Ministry of Foreign Affairs by the Hawaii-based think tank Pacific Economics, described the Prince Group as “deeply involved in transnational criminal activity.” The conglomerate, led by Chinese national Chen Zhi, has been linked to money laundering and human trafficking, according to an earlier Radio Free Asia (RFA) investigation.
Foreign Investments Under Scrutiny
Palau has witnessed an influx of foreign investors in recent years, with concerns that some of these investors have criminal ties. Pacific Economics founder Jarod Baker said the surge in high-value investments has raised alarm bells.
“Everyone on the ground sees what’s happening,” Baker told RFA. “It’s an insane amount of money being spent there.”
Among the key findings of the report is the Prince Group’s alleged involvement in multiple resort and hotel projects in Palau, with a total estimated investment of $1 billion—more than three times the country’s annual economic output. One such investment includes a 99-year lease for Ngerbelas, an uninhabited island in northern Palau, reportedly acquired for just $1 million.
“Land is Palau’s biggest asset, and these leases tie it up for five generations with no obligation to maintain it or create jobs,” Baker said.
Palau’s Response and Alleged Connections
The Palauan government acknowledged challenges in screening foreign investors but refrained from commenting directly on the Prince Group.
“As a small island developing state, we aggressively pursue investment and development partners but also recognize that some individuals or organizations may view us as vulnerable targets,” a spokesperson for the Office of the President told RFA.
The government said it is strengthening policies to counter illicit investments and has increased cooperation with U.S. intelligence agencies and Interpol.
Documents obtained by RFA show that Prince Group’s chairman, Chen Zhi, is a director and 37.5% shareholder of Grand Legend International Asset Management Group, a Palau-registered firm. Additionally, Rose Wang, a longtime Chinese expatriate in Palau, was listed as a director of the company that now holds the lease to Ngerbelas Island.
Wang, also known as Wang Guodan, was designated an “undesirable alien” by Palauan authorities in 2022, a status that typically voids visas and prevents future applications. However, she continues to operate a hotel and restaurant in Palau.
She denied any connection to the Prince Group, telling RFA, “I don’t even know Chen Zhi. I have nothing to do with Prince’s business.”
Despite her denial, corporate records show Wang as the registered agent for Grand Legend International Asset Management Group. The firm’s listed address is her hotel.
Links to China’s Global Influence Efforts
Experts say Wang has deep connections to Chinese state-affiliated organizations. She previously held leadership roles in the Palau Overseas Chinese Federation, a group operating under the guidance of China’s Ministry of Foreign Affairs. Such organizations are often used by Beijing to influence communities in countries that recognize Taiwan, as Palau does.
While there is no direct evidence linking Prince Group’s investments to Chinese state objectives, Baker suggested that Beijing has historically used criminal networks to advance its interests.
“China has used transnational criminal organizations to achieve state priorities for centuries,” he said. “It’s not a stretch for me to imagine that China would use Prince to their benefit.”
A former Chinese security agent previously told RFA that the Prince Group was involved in an abandoned plot to kidnap a dissident from Taiwan, though the company has denied the claim.
Taiwan Also Monitoring the Situation
Prince Group also has a presence in Taiwan, where it operates under a “foreign-invested” designation rather than a “Chinese-invested” classification. This status allows it to bypass certain regulatory restrictions on Chinese capital.
Taiwan’s Ministry of Foreign Affairs acknowledged concerns about foreign-backed criminal networks.
“China has long been utilizing specific Chinese-background businessmen and even criminal organizations with specific purposes to infiltrate our diplomatic ally, Palau,” a spokesperson told RFA.
As scrutiny over foreign investments grows, Palau faces increasing pressure to tighten its investment policies and ensure that business partnerships align with national security interests.