Intensifying US-China rivalry is deeply affecting the security arrangements, economic interdependences, and diplomatic relations in the Indo-Pacific region, which is now the epicenter of geopolitical competition. For the past several decades, the Indo-Pacific was characterized by a stable balance of power, established maritime norms, and a high level of economic cooperation. Today, the two superpowers are competing to control the political, technological, and economic instruments that govern the primary trade routes of the region, creating a dilemma for those countries that are economically dependent on China and rely on the U.S. for security. This rivalry is forcing government throughout the region to adjust their policies and positions in an increasingly economically and politically polarized world, and restructure their supply chains, for the new geopolitical realities.
Evolution of U.S.–China Rivalry in the Indo-Pacific
The growth of US-China rivalry developed over time as both powers expanded their influence. In the early 2010s, China started ramping up its military presence in the South China Sea while also expanding its infrastructure funding through the Belt and Road Initiative across Asia, Africa, and the Middle East. China’s influence through military modernization grew in the strategic sea lanes and chokepoints. This prompted the United States to ‘pivot to Asia’, reinforcing and expanding alliances as its naval presence developed and it advocated for a free and open Indo-Pacific. What could have been a controllable strategic rivalry began to evolve into a major systemic challenge. Routine maritime patrols and trade restrictions interwined with technology investments to become tools of influence projection, while states like Japan, India, and Australia began a shift in their regional engagement policies.
Regional Security and Economic Challenges
This rivalry has presented both short- and long-term challenges. The most prominent is the growing risk of unintentional conflict. Increased naval patrols on top of military exercise close to each other in contested waters, and numerous close-range flights aggravate the prospect of conflict miscalculation.
All it takes is a miscommunication, technical fault, or slight bump in the hasty workings of either machine. The other challenges stem from the strategic pressure placed on nations of the region, Vietnam, Indonesia, and Singapore. These nations base most of their economic interactions to China, and at the same time, depend on America for their military and defense needs. The situation creates a paradox that results in ‘transactional diplomacy’ whereby these nations try to maintain equilibrium between economically engaging with China and addressing the diplomatic or military concerns with the US.
In relation to this, the economic worth of a nation is being adversely affected by the collapse of technology ecosystems and supply chains. The soft economic power competition over digital technology, semiconductors and the capacity for digital manufacturing has produced competing forms of economic structure and governance. China continues to augment its role in trade with the US leaving China to undergo trade partnerships that offer ‘supply chain’ trade frameworks with high digital economy priorities. As a result, China and the US are significantly reducing and altering the economic interdependence of the region and forcing states to economically align unilaterally with either country. The mechanisms with the center being ASEAN of multilaterilism are finding it difficult to maintain equilibrium in the region with their US and China influenced multiple initiatives disrupting the unity of the region.
A close examination of the Indo-Pacific shows how security, economic, and diplomatic components converge to change the region’s power dynamics. The region is undergoing a great-power balancing reassertion. The Quadrilateral Security Dialogue has become the focal point of the US’s cooperation with likeminded allies, facilitating collective military training, maritime coordination, and tactical intelligence sharing and signaling. For its part, China has diversified its naval capabilities, built militarized structures on contested features, and expanded its ability to capture and project power on the Periphery, promoting its ability to reshape maritime order. The arms race goes beyond military capabilities to include the realms of cyberspace, artificial intelligence, and satellite technologies.
In economic terms, the rivalries manifest as a competition between two visions of regional order. China’s trade and manufacturing centrality, coupled with the regional market integration through its infrastructure finance and large trade agreements, positions China as the region’s economic pivot. The US counters with its digital standard initiatives, transparent finance, and reliable logistics. These competing visions impact states that want to adopt open and inclusive economic policies. Nowhere else is this more apparent than in the technologies where the geo-economic implications of decisions related to 5G, digital infrastructure, and semiconductors are significant.
Middle powers such as South Korea and Japan have strong relations with the United States and work to maintain relations with China as well. This becomes more complicated with tensions. The neutral HP states are also being pressured to take a side. South Korea and Japan want to maintain a balance and prevent themselves from getting caught up in a big power rivalry. They seem to utilize an economic relation with China, while relying on the United States for security. This shows a desire to and prevent war, even with all of the opacity in the world.
There are not many states in the world that have the capacity to shape the world order. The big states such as the US and China are in a constant power struggle, which makes the world order more volatile. The world needs to strengthen its ASEAN and East Asia Summit to lessen the tensions that come with a big China US power struggle. These could also help with better communication and understanding for crisis avoidance. The current situation on the Indo-Pacific does not seem to be a short-term issue, and not likely to improve anytime soon. The Asia-Pacific Economic Cooperation is one of the inclusive economic frameworks that can also support open trade, diversified supply chains, and harmonized tech disciplines. Regional states can pursue cooperative and open economic systems, rather than being driven into competitive blocs. Australia’s, India’s and Japan’s middle power diplomacy can be expanded in order to facilitate, champion the rule of law, and increase cooperation in maritime security, tech governance, climate change, and other aspects of regional development.
Managing Great-Power Competition
Lastly, confidence building measures such as military hotlines, transparency measures, joint naval exercises, and multilateral security dialogues, are also vital to mitigate the chances of misperception from occurring. They maintain predictability and communication in high pressure situations.
In combination, these policy streams present a realistic opportunity to address the great power competition in a way that maintains regional order and economic development, as well as strategic autonomy in one of the world’s most important geopolitical spaces.
Disclaimer: The view expressed in this article are the author’s own. They do not necessarily reflect the editorial policy of the South Asia Times.
