Two members of Palau's National Congress have called for more cooperation with China amid pressure over its ties with Taiwan.
They were at the groundbreaking for Palau's largest resort, backed by Chinese investors.
The 600-room Wyndham Global resort in Aimeliik is expected to open in 2020 and is being developed by the Sea Sky International Development Group.
Island Times reported the developer's president Selina Zhong as saying the retreat will build a bridge between China and Palau.
This is despite the ban Beijing imposed in November on its tourist agencies operating in Palau, which maintains diplomatic relations with Taiwan.
At the groundbreaking, congressman Sabino Anastacio said the resort will bring in more Chinese tourists and his colleague Hokkons Baules urged Palauans to befriend China.
A Chinese diplomat was also reportedly present at the ceremony.
Responding to the China ban, Taiwan's carrier China Airlines temporarily added two more weekly flights to Palau and Taipei has promised to further assist through discounts for Taiwanese tour groups in Palau.
Taiwan's Foreign Ministry is also planning to send a series of business delegations to Palau and its other Pacific allies.