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Foreign Minister Penny Wong has praised Palau's government for its commitment to regional unity against the backdrop of China's rising influence in the Pacific.
In a joint press conference in Palau, Senator Wong spoke of the importance of the relationship between the two countries and was joined by her opposition counterpart, Simon Birmingham, on the last stop of a bipartisan Pacific tour.
Senator Wong thanked president Surangel Whipps for his leadership on regional ties and climate action.
"You understand, Mr President, the importance of regional unity that inclusive, robust regional structures ... is a way of protecting sovereignty, of enhancing choices for countries at a time when there is contest, there is COVID and there is climate change," she told reporters on Thursday.
"(These are) all things which are better navigated together, stronger together."
Mr Whipps, who has previously said he would stand up to Chinese "bullying", vowed that his country would not have its foreign policy dictated by Beijing.
He reaffirmed Palau's diplomatic relationship with Taiwan and his nation's policy as "friends to all, enemies to none".
"We've told China that, as friends, you shouldn't tell your friends who their friends can be ... you're not going to tell us we can't be their friend," Mr Whipps said.
"Like Australia and the United States, Taiwan has been a strong ally and partner and we feel that that relationship is important to continue to maintain.
"Nobody else should tell us that we should dissolve that relationship."
He said China had "turned the tourist tap off" in response to Palau's position, which had affected the small Pacific island country's visitor-dependent economy.
Mr Whipps also spoke of the importance of flights between Australia and Palau, which start in February, as a measure to keep the Pacific nations connected.
Senator Wong said the delegation would visit a solar project site, financed through an Australian government program for Pacific island countries, that wouldn't add to sovereign debt.
China's development loans are mainly debt-financed, and have been criticised for trapping poorer countries with unsustainable debt they cannot pay back.
