A former president of Kiribati, Teburoro Tito, has called for tighter government controls on foreign investors.
His concerns come after local shop owners complained that they are being undercut by a growing number of Chinese businesses.
Mr Tito said that under the Foreign Investment Act outsiders are not meant to start businesses in areas where local people are already doing well.
But he says many Chinese manage to avoid going through the foreign investment channel and he says locals are being used as fronts for foreign enterprises.
"Using local names, local people and I have received complaints from local people about this and I have assisted them to see the authorities concerned. But I have not seen any sign of the authorities taking action on these concerns."
Mr Tito said that the future of local business is at stake if the authorities do not take the matter seriously.