"Simply put, we are witnessing political warfare in our country," outgoing leader David Panuelo warned lawmakers, detailing allegations of Chinese espionage, coercion of government officials and "direct threats" against his personal safety.
Panuelo had previously voiced concerns about Beijing's growing power in the South Pacific, most notably opposing a security deal that could allow Chinese troops to be deployed to the region.
But his letter went much further, warning the incoming government about a barrage of threats that he believes risk making the sparsely populated island federation a vassal state.
China, he said, had "demonstrated a keen capability to undermine our sovereignty, rejects our values, and uses our elected and senior officials for their own purposes".
Among the dramatic allegations, Panuelo claims his own cabinet colleagues transmitted recordings of bilateral meetings directly to China.
"We are bribed to be complicit, and bribed to be silent. That's a heavy word, but it's an accurate description regardless," he said.
"What else do you call it when an elected official is given an envelope filled with money after a meal at the PRC embassy or after an inauguration?" he said, using the initials of China's formal name, the People's Republic of China.
He also said he was personally followed by "two Chinese men" while attending a meeting in Fiji last July.
Paneulo claimed that both were embassy officials and that one was later identified as an "intelligence officer" with the Chinese military.
"To be clear: I have had direct threats against my personal safety from PRC officials acting in an official capacity," he added, also claiming he had to change his phone number because of "incessant" calls from China's ambassador trying to persuade him to accept Chinese Covid-19 vaccines.
Panuelo also revealed he had been in discussions with Taiwan's foreign minister about an agreement allowing his country to distance itself from Chinese funding and support -- with Taiwan offering to pick up the tab for major projects currently bankrolled by China.
Beijing swiftly condemned the claims, accusing Panuelo of "smears and accusations" that "do not accord with the facts".
"China has always treated all countries, big or small, as equal," foreign ministry spokesperson Mao Ning told a regular briefing.
"The Chinese side is always willing -- on the basis of the One China Principle -- to uphold the principles of mutual respect, equality and mutual benefit, push forward friendly cooperation with Micronesia," she added, referring to a principle by which countries that recognise Beijing do not have ties with Taiwan.
Beijing views self-ruled democratic Taiwan as part of its own territory -- vowing to seize it by force one day if necessary -- and opposes any official exchanges by other governments with Taipei.
Taiwan's foreign ministry on Friday declined to comment on whether it had been in contact with Micronesia, as Panuelo had described in the letter.
But the ministry said it welcomed "any effort to expand mutual relations" with Micronesia.
"We are happy... to help with Micronesia's development to improve the well-being of its people," the ministry said.
"Taiwan share the common values of democracy, freedom, human rights and rule of law with like-minded countries in the Pacific region."
- Bribery allegations -
Panuelo, 58, lost his reelection bid earlier this week, signalling an end to his four-year term as leader -- with his successor expected to be elected by the congress in May.
Panuelo urged lawmakers to pass legislation to protect the country against money laundering and promote political integrity.
"Have you personally received a bribe from the PRC? If the answer is 'no', you are in the minority," he said.
The Federated States of Micronesia -- which has a population of just over 100,000 people -- is closely allied with the United States, maintaining strong ties to Washington even after gaining independence more than three decades ago.
Washington and Beijing are increasingly competing for influence in the Pacific, as China chases more sway in the strategically important region.
Although nestled in the middle of the Pacific, the Federated States of Micronesia straddles a major maritime crossroads and lies southeast of Guam -- home to a vast array of US military assets that could prove vital in any conflict over Taiwan
oney laundering and promote political integrity.
"Have you personally received a bribe from the PRC? If the answer is 'no', you are in the minority," he said.
The Federated States of Micronesia -- which has a population of just over 100,000 people -- is closely allied with the United States, maintaining strong ties to Washington even after gaining independence more than three decades ago.
Washington and Beijing are increasingly competing for influence in the Pacific, as China chases more sway in the strategically important region.
Although nestled in the middle of the Pacific, the Federated States of Micronesia straddles a major maritime crossroads and lies southeast of Guam -- home to a vast array of US military assets that could prove vital in any conflict over Taiwan.
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