Papua New Guinea is a relatively recent independent state engaged in a struggle to develop economically and exercise a degree of sovereignty. This work articulates the challenges that confront the young nation including, security, economic viability, delivery of services, and control of political corruption. While these are matters internal to the functionality of the nation state, the author argues that matters have changed dramatically with China’s growing influence in the region and the ensuing competition between the United States and China. With this increasing geopolitical importance there is the promise of financial benefit, but there are also new challenges as there is the ever-present danger of becoming enmeshed in superpower competition. David Lea argues that lack of economic development and continuing aid dependency may well render island nations such as Papua New Guinea susceptible to political manipulation and further loss of sovereignty, including even a risk of military involvement.