Palau's National Gymnasium in Koror was the unlikely venue for a geopolitical flashpoint on Monday night.
On the stage for the Pacific summit's opening ceremony were traditional dancers, Pacific leaders and speeches pleading for unity and climate action.
And in the crowd, along with Anthony Albanese and other regional leaders, were delegates from external powers - including Taiwan Foreign Minister Lin Chia-lung and China's Pacific envoy Qian Bo.
Mr Qian said he had "serious concern" at Mr Lin's attendance and had lodged diplomatic objections at Taiwan's presence at the summit.
"We have made our position very clear to the government of Palau and the (Pacific Islands Forum) secretariat," he said.
Asked if there would be consequences, Mr Qian said "there will always be consequences".
"It should not have happened. We think it's very inappropriate," he said.
On Tuesday, Mr Lin fired back, saying the envoy was guilty of "wolf warrior diplomacy".
"What he stands for, basically, is threat," he said at a press briefing.
"China is not a normal nation. China uses diplomacy to achieve its political gains."
Mr Lin took aim at China's recent missile test, its debt-trap diplomacy, attempts at economic coercion and more in a over hour-long press conference.
"Whenever China goes to a party, it makes itself as if it's the host and China ruins the whole atmosphere of the party," he said.
As for Mr Qian's promised consequences, it is not yet clear what they will be.
The ABC reported that Mr Qian's formal statement to the Pacific Islands Forum was quite mild, while referring to the "One China" principle.
China and Taiwan share an unresolvable problem, with Beijing believing the US-backed island is an inalienable part of its territory, and Taipei claiming it is sovereign.
Beijing uses fierce diplomacy to subdue Taiwan's claims, preventing the vast majority of governments from political engagement with Taiwan, though many nations - including Australia - hold strong economic links.
There is no PIF rule preventing Taiwan's presence, with Palau President Surangel Whipps offering a pointed rebuke to countries looking to control the region.
"The world increasingly recognises the strategic important of our region and we welcome friends and genuine partnerships," he said in his opening address.
"Our partners are welcome to sail with us, but they do not chose our destination.
"The Pacific agenda must be driven by us, for us, and the forum must remain the political home in which that agenda is shaped."
Mr Albanese also asserted the right for PIF members to make their own ground rules.
"The Pacific Islands Forum determines what happens here, not any other country," he said.
There is a distinction between China and Taiwan's status within PIF, with China a dialogue partner which can sit around the table at formal sessions, and Taiwan a development partner with lesser rights.
Also on Tuesday, representatives from New Zealand and the US announced a port upgrade at Penrhyn in the Cook Islands.
The US will spend $US50 million ($A70 million), and New Zealand $US10 million ($A14 million) on the facility in the northernmost island in the Cook Islands, once a military base.
The development is likely to be used for extraction of deep sea minerals, a deeply controversial practice, but a desire of Cook Islands Prime Minister Mark Brown.
The 55th PIF leaders meeting has also been notable for a lengthy list of no-shows.
Leaders from Fiji, Kiribati, New Caledonia, Samoa, Solomon Islands and Vanuatu are not attending for a range of reasons, with Kiribati not sending any political representation.
Mr Albanese said the summit would not lose its authority because of a few absences.
"This is a well-attended meeting of the Pacific Islands Forum, and I don't think it's productive to talk it down. I'm talking it up," he said.