Shoring Up Defenses

The Indo-Pacific will be the “epicenter of 21st century geopolitics,” according to the 2022 US National Security Strategy.^[1]  The region’s geostrategic significance is striking: the Indo-Pacific is home to 60 percent of the global population and responsible for 60 percent of the world’s GDP.^[2] Important trade routes are located in the region, with 25 percent of all maritime trade passing through the Strait of Malacca alone.^[3] 

The Indo-Pacific is also the key theater for Chinese-US rivalry. Beijing is advancing a vision for the region that places China at the center. It is pushing for a security architecture “by Asians for Asians,” which implies a region free from US alliances and influence.^[4] China has underlined this ambition with its Belt and Road Initiative, an economic infrastructure project that many states in the region are part of. The US has also stepped up its engagement in the region. It has been adjusting its military force posture, deepening alliances and partnerships, and initiating new economic outreach programs.^[5] Washington has also embraced the concept of a “Free and Open Indo-Pacific,” which is based on an understanding of regional order that is not centered on China, but on the rule of law and the ability of all countries in the region to pursue their own interests freely and without intimidation.^[6] The coming years will likely see more intense competition between these mutually exclusive visions of order, setting the stage for zero-sum dynamics between China and the US.

Yet the fate of the Indo-Pacific will not be decided by the two superpowers alone. Regional actors play a crucial role as “order shapers” rather than just “order takers.”^[7] In fact, the concept of the Indo-Pacific was coined by Japan.^[8] While it was developed in response to China’s destabilizing behavior in the region, the concept also mirrors a desire to preserve Indo-Pacific countries’ agency vis-à-vis both superpowers. Most countries prefer good relations with both Washington and Beijing.^[9] Yet multi-alignment is becoming more difficult as great-power rivalry becomes more pronounced in the region.^[10]

Chinese revisionist behavior is unnerving the US and other countries in the
Indo-Pacific. China asserts sovereignty over almost 90 percent of the South China Sea and its resources – territorial claims that are in conflict with those of other littoral states.^[11] Despite the Permanent Court of Arbitration in the Hague invalidating Chinese territorial claims back in 2016, China continues to assert its territorial ambitions ever more vehemently.^[12] In 2023, the Philippines complained about a Chinese Coast Guard ship provoking a collision with a Philippine vessel.^[13] China has also artificially created and militarized islands in the contested waters.^[14] As a signal that they do not accept China’s unlawful behavior, the US and its allies have sent ships and aircraft into the South China Sea.^[15] The increased military presence by both China and the US and China’s assertive behavior are stoking fears about a growing risk of accidents and escalation.^[16]

Other countries have also aligned their security more closely with Washington, albeit more reluctantly. Indonesia announced a new defense cooperation with the US in November 2023.^[32] India, known for its strong preference for multi-alignment, has also deepened its security cooperation with the US since Chinese and Indian militaries clashed in the Himalayas over a long-standing border dispute.^[33] In an effort to counterbalance China’s growing influence in the region, India has intensified military exercises and intelligence sharing with the US, and the two countries now jointly produce jet engines for fighter aircraft.^[34] Furthermore, New Delhi has become more open to cooperation beyond bilateral relations and is now taking a more engaged approach to “minilateral formats,” such as in the Quadrilateral Security Dialogue, known as the Quad, which consists of Australia, India, Japan, and the US.^[35] Despite some notable exceptions, such as the Solomon Islands, which signed a security agreement with Beijing in 2022, many Small Island Developing States – among them the Marshall Islands, Micronesia, Palau, and Papua New Guinea – have also moved closer to the US, concluding or renewing security agreements with Washington.^[36]

As Chinese-US rivalry advances, observers worry that the trend toward minilateral frameworks comes at the expense of more inclusive, multilateral approaches. Previously, the Association of Southeast Asian Nations (ASEAN), a conglomeration of ten larger and smaller states, was front and center to multilateral cooperation in the Indo-Pacific and deliberately sought to advance inclusive avenues for countries to work together, regardless of differences in the way they govern themselves.^[37] ASEAN took pride in not siding with either China or the US.^[38] Yet as great-power rivalry increases, ASEAN risks losing relevance due to its inability to develop a unified response to China’s new assertiveness.^[39] Recent surveys show disappointment with ASEAN, with respondents concerned about it becoming “irrelevant in the new world order.”^[40] Indeed, like-minded actors worried about China are increasingly pursuing their political goals in formations like the Quad or AUKUS. This more piecemeal approach to regional cooperation offers flexibility on certain issues, but might hinder countries from cooperating on topics where broad coalitions are necessary, such as the climate crisis or arms control.

Despite growing efforts to counterbalance Beijing’s influence, China still holds outsize economic leverage over countries in the Indo-Pacific. In 2021, China was the most important trading partner for all key economic players in the region, with the exception of India.^[41] While this may be changing for some countries,^[42] economic dependence on Beijing explains why the region tries to avoid breaking with China. Yet as China demonstrates a propensity for restricting the export of critical raw materials or limiting access to its market over political disagreements, dependence on trade with China has come to be seen as a security liability in many countries.^[43] 

Decreasing economic dependency on China, however, is not easy: the US launched the Indo-Pacific Economic Framework (IPEF) in 2022, signaling its intent to expand its economic leadership in the region.^[44] Yet critics lament that the framework does not facilitate access to the US market for participating countries, casting doubt on the seriousness of the US’s economic outreach to the region.^[45] Furthermore, countries that are now members of the IPEF framework have generally become more rather than less reliant on trade with China since 2010,^[46] with their export destinations having become 31 percent less diversified and their import sources 28 percent less diversified on average.^[47] Overall, the US is on the back foot with its efforts to increase its economic leverage in the Indo-Pacific after former US President Donald Trump exited an ambitious trade agreement known as the Trans-Pacific Partnership.^[48] This trade pact continues to exist without the US, now named the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.^[49] US President Joseph Biden admitted that “when we backed out of [the Trans-Pacific Partnership] – we put China in the driver’s seat.”^[50] 

As the Indo-Pacific shapes up to be a decisive region for the global order of the 21st century, many countries in the region would prefer to entertain good relations with both China and the US. Yet they are increasingly left with imperfect options that make multi-alignment more difficult.