Neither Washington nor Beijing: How the Asia-Pacific Is Building Its Own Order

Essay Contest Honorable Mention

In 2023, India signed the Initiative on Critical and Emerging Technologies with the United States and participated in the Quad Leaders Summit. That same year, its bilateral trade with China reached a historic high of around $136 billion while a military standoff continued along their disputed Himalayan border. [1] For New Delhi, these realities reflected a calculated strategy rather than a contradiction.

This is the basic logic shaping contemporary geopolitics in the Asia-Pacific. The rivalry between the United States and China is intensifying across trade, technology, and military domains. The dominant narrative in Washington and Beijing is that regional states must choose one side or the other and that this competition will eventually divide the region into rival blocs. That description misreads the reality in the region. The Asia-Pacific is not splitting into fixed blocs. It is quietly adjusting through strategic hedging, supply-chain diversification, and flexible security arrangements. By avoiding hard commitments, these countries are constructing what can be called selective multipolarity, an order shaped not by two superpowers but by the calculated agency of the many states that live between them.

While India is the clearest example of this dynamic, a similar pattern plays out across the region. Understanding it requires looking at three related dynamics: how middle powers hedge to protect their strategic interests, how governments and businesses diversify supply chains while maintaining economic ties with China, and how the security order is fragmenting into overlapping networks instead of rigid blocs.

The Art of Not Choosing

The standard vocabulary of international relations gives secondary states two options when a great power rises: balance against that power or align with it. Across the Asia-Pacific today, both choices are being quietly declined in favor of something harder to categorize but far more rational. Known as omnidirectional hedging, this strategy relies on a deliberate diversification of economic, diplomatic, and security relationships. It ensures that no single power can dictate a country’s future. [2]

Japan employs this strategy with unusual clarity. Under its 2013 National Security Strategy, Tokyo reinterpreted its post-war constitutional constraints to pursue “proactive pacifism,” a doctrine that gives the Self-Defense Forces significantly more operational flexibility. Defense spending increased from 4.8 trillion yen in 2013 to a projected 6.8 trillion yen in 2023. Tokyo is using NATO’s 2 percent-of-GDP benchmark as a target for defense-related spending by 2027. [2] This is internal balancing: Japan is building its own capacity rather than simply relying on the United States’ security umbrella.

Tokyo also made sure it was not economically subordinate to Washington’s preferences. After the United States withdrew from the Trans-Pacific Partnership in 2017, Japan stepped in to revive and restructure it into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This trade agreement aims to ensure Tokyo remains a regional rule-maker regardless of U.S. participation. Japan also expanded its international military cooperation through new bilateral exercises. It held an inaugural fighter jet exercise with India in 2023 and its first bilateral naval exercise with the Philippines in 2024. In 2023, Tokyo resumed formal security talks with Beijing after a four-year freeze. These are not contradictions. They are the choices of a state seeking leverage rather than dependency.

Australia follows the same pattern from a different position. Former Prime Minister Tony Abbott described Australia’s policy toward China as driven by “fear and greed.” This characterization reflects anxiety over Chinese military assertiveness balanced against a deep economic reliance. China is still the destination of over 35 percent of Australian exports and accounts for 25 percent of its imports. [3] AUKUS and the Quad address the fear. Joining the Asian Infrastructure Investment Bank (AIIB), signing the Regional Comprehensive Economic Partnership (RCEP), and entering 12 other free trade agreements since 2013 have helped manage the vulnerability. In 2023, Australia’s prime minister visited Beijing to stabilize ties after a sharp diplomatic decline. It was not a retreat from security commitments but a recognition that sustaining those commitments requires a stable foundation.

India presents a more complex form of hedging. New Delhi signed three foundational defense pacts with the United States between 2016 and 2020: the Logistics Exchange Memorandum of Agreement (LEMOA), the Communications Compatibility and Security Agreement (COMCASA), and the Basic Exchange and Cooperation Agreement (BECA). These establish the logistics and intelligence-sharing systems needed to cooperate effectively during a crisis. India has also signed the RELOS (Reciprocal Exchange of Logistics Support) agreement with Russia and secured access to French military facilities in Madagascar and Djibouti, spreading its logistics networks across multiple major powers at once. [2] India joined the Quad while consistently rejecting any characterization of it as an anti-China alliance. Its Act East policy, building connectivity with Southeast Asia through projects like the 3,200-kilometer India-Myanmar-Thailand Trilateral Highway and the Kaladan Multimodal project, functions as an alternative to Chinese-led regional infrastructure, not a U.S.-aligned substitute.

Structural realities keep these states from forming a unified pro-U.S. coalition. Countries like South Korea and the Philippines are highly sensitive to the U.S.-China competition but deeply exposed to Chinese economic retaliation, with China accounting for around one-fifth of their GDP in trade. [4] The 2017 THAAD (Terminal High Altitude Area Defense) episode, in which South Korea faced punishing Chinese trade sanctions after agreeing to host a U.S. missile defense system, was a lesson in the costs of full alignment. [4, 5] Thailand has lower sensitivity to the strategic competition, but high economic dependence on China—it maintains a firmly neutral foreign policy. These divergences make a NATO-style alliance structurally impossible, not just politically difficult. [4] Collective commitment requires shared threat perception and shared vulnerability, and neither exists uniformly across the region.

Supply Chains: Economic Hedging in Practice

If strategic hedging is the political expression of this emerging order, supply-chain diversification is its economic expression, and it is reshaping the region’s industrial geography in ways that will survive any particular administration in Washington or Beijing.

U.S. tariffs on Chinese goods from 2018 onward, along with rising labor costs in China and growing concerns about single-source dependency, have pushed multinational firms toward a “China Plus One” strategy: maintaining production capacity in China while building alternative hubs elsewhere. The beneficiaries have been concentrated mostly in Southeast and South Asia. In 2023, HP launched its largest manufacturing shift to date, aiming to relocate up to 70 percent of its PC production out of China, with Thailand emerging as its primary new hub. Major semiconductor companies including Micron, Intel, and Ferrotec have made substantial investments in Malaysia. Roughly 33 percent of Asia-Pacific executives are building parallel supply chains to insulate operations from geopolitical disruption. Another 29 percent are developing dual networks to serve Chinese and U.S. markets under separate regulatory regimes. [6]

But diversification is not decoupling. China remains embedded in the new supply chains as a primary supplier of components, materials, and intermediate goods. Electronics assembled in Vietnam and exported to American consumers frequently contain Chinese-made parts. Businesses are pursuing resilience, not full separation, and building the capacity to adapt to disruptions is not the same as a clean exit from Chinese industrial networks. That distinction matters because it limits how far any political realignment can actually go.

Here, India’s role in the new economic geography becomes significant. Rather than being a destination for investments displaced from China, India under the Act East framework is trying to position itself as a regional economic hub in its own way. The connectivity projects extending through Southeast Asia attempt to tie smaller economies into Indian-anchored networks as an alternative to Chinese-led ones. Whether the execution matches this ambition remains contested, but the intent reflects the pattern: Build your own options before someone else chooses them for you.

Institutions in the region strengthen this dynamic. The RCEP, which entered into force in 2022, is a China-centered trade framework that includes U.S. treaty allies Japan, South Korea, and Australia while excluding the United States entirely. Whatever Washington achieves through its security arrangements, Beijing continues to shape the rules of regional trade governance through RCEP. The Indo-Pacific Economic Framework (IPEF), launched by the Biden administration in 2022 and designed to counter China’s regional influence, has struggled to offer the market access provisions that would make it genuinely attractive to regional partners. Regional states perceive Chinese economic influence as more immediately threatening than Chinese military power, and view U.S. military presence as an ineffective counterweight to Chinese economic leverage. [7] That asymmetry has real consequences for how durable American regional leadership can be.

Security Without Commitment

The security order emerging across the region reflects the same preference for flexibility over alignment. The proliferation of minilateral groupings, such as the Quad, AUKUS, the U.S.-Japan-South Korea trilateral, and various bilateral access agreements, suggests a new containment system is forming around China. However, this interpretation has clear limits.

The Quad carries no mutual defense commitment and has no unified command structure. Its agenda focuses on cooperation in maritime domain awareness, clean energy, critical technologies, and infrastructure financing. It is designed to offer tangible benefits to its partners without imposing formal alliance obligations. For India especially, the Quad’s non-alliance character is not a structural defect; it is the precondition for participation. If the Quad becomes a formal security alliance, India’s commitment to strategic autonomy would make its continued membership unsustainable.

The case of the Philippines highlights the conditional reality behind even the strongest security commitments. Manila has significantly expanded U.S. military access under President Marcos Jr., granting basing rights at sites positioned near Taiwan and the South China Sea. Simultaneously, it has pursued direct negotiations with Beijing over maritime incidents while maintaining substantial economic ties with China. [8] Manila is not choosing Washington over Beijing. Instead, it is seeking enhanced deterrence while preserving room to manage the relationship with its largest trading partner.

Japan’s own strategic shift, doubling its defense budget and developing counterstrike capabilities, is driven by Japanese threat perception of Chinese military modernization and North Korean missile development. [9] The alignment with U.S. preferences is real, but it follows from Japanese strategic reasoning rather than substituting for it.

Beijing has actively advanced its own alternative frameworks. When introducing the New Asian Security Concept (NASC) at the 2014 CICA Summit, President Xi Jinping declared that “it is for the people of Asia to run the affairs of Asia, solve the problems of Asia and uphold the security of Asia.” [10] Building on this vision, China’s Global Security Initiative (GSI), launched in 2022, explicitly rejects exclusive security and bloc confrontation. It is framed as a direct alternative to the targeted U.S. tech-containment strategy, often described as a “small yard, high fence” approach. [11] These are not mere strategic narratives; these initiatives often represent a deliberate effort to undermine the U.S. alliance system by framing it as external interference and to position China as the natural center of an Asian security order built on development and national sovereignty.

These initiatives remain less effective not because of U.S. opposition, but because of China’s own behavior. The militarization of the South China Sea, the 2020 border clash with India, and the economic coercion against Australia and Lithuania have often undermined the credibility of China’s stated preferences. ASEAN has responded with the ASEAN Outlook on the Indo-Pacific, a document designed primarily to prevent the region from being divided into exclusive spheres of influence by either power. [12] New Delhi launched the Indo-Pacific Oceans Initiative (IPOI) in 2019 to establish maritime governance principles independently of both Washington and Beijing. [13] These are acts of institutional self-preservation.

Writing the Region’s Own Rules

Neither Washington nor Beijing will be able to reshape the Asia-Pacific on its own terms. The states that would need to form any coherent bloc are the same states simultaneously deepening trade ties with China, signing security agreements with the United States, building their own connectivity infrastructure, and joining every available institutional framework regardless of who leads it.

For the United States, the implications are significant. U.S. military influence cannot effectively counterbalance Chinese economic leverage in the eyes of regional partners. [7] Without a trade and investment strategy that gives regional economies a reliable alternative, the security arrangements lack a significant commercial foundation. For China, the challenge is largely self-inflicted. The NASC and GSI fall short not because their underlying ideas lack appeal, but because regional states judge Beijing by its actions rather than its rhetoric. Every act of maritime coercion and every episode of economic retaliation against a smaller partner confirms the logic of hedging and pushes states toward the security alliances Beijing opposes.

And then there is India: buying Russian arms, trading with China at record levels, hosting the Quad summit, building roads into Southeast Asia, and still refusing to take sides. This approach reflects a calculated effort to retain its strategic choice. This balancing act is evident across the region. The Asia-Pacific order being built today is neither Washington’s design nor Beijing’s. It is being written by the states that must live in it. This reality is giving them considerably more influence over the outcome than either great power anticipated.

References

[1] Tarapore, A. (2023). Zone balancing: India and the Quad’s new strategic logic. International Affairs, 99(1), 239–257. https://doi.org/10.1093/ia/iiac281

[2] Munir, M., & Safdar, A. (2023). Sino-US strategic competition in the Asia-Pacific: Omnidirectional hedging of traditional middle powers. Strategic Studies, 43(2), 21–44. https://www.jstor.org/stable/48829171

[3] Interesse, G. (2023, May 19). China-Australia trade relations growing stronger. China Briefing. https://www.china-briefing.com/news/china-australia-trade-relations-growing-stronger/

[4] Ling, S. (2025). Realignment in Asia? U.S. regional allies’ responses to China–US competition. The Chinese Journal of International Politics, 18(4), 473–495. https://doi.org/10.1093/cjip/poaf014

[5] Lim, D. J., & Ferguson, V. A. (2022). Informal economic sanctions: The political economy of Chinese coercion during the THAAD dispute. Review of International Political Economy, 29(5), 1525–1548. https://doi.org/10.1080/09692290.2021.1918746

[6] Economist Impact. (2025). Trade in transition regional insights: Asia Pacific: Betting big on regional diversification and digital innovation. https://insights.economistenterprise.com/projects/trade-in-transition/pdfs/Trade_in_Transition_Regional_Insights_Asia_Pacific_2025.pdf

[7] Lin, B., Chase, M. S., Blank, J., Cooper, C. A., III, Grossman, D., Harold, S. W., Moroney, J. D. P., Morris, L. J., Ma, L., Orner, P., Shih, A., & Kim, S. (2020). Regional responses to US-China competition in the Indo-Pacific. RAND Corporation. https://doi.org/10.7249/RR4412

[8] Fan, Z. (2024). The logic of the Marcos Jr. Government’s South China Sea Policy. Marine Policy, 167, Article 106248. https://doi.org/10.1016/j.marpol.2024.106248

[9] Cabinet Secretariat, Government of Japan. (2022, December). National Security Strategy of Japan. https://www.cas.go.jp/jp/siryou/221216anzenhoshou/nss-e.pdf

[10] Xi, J. (2014, May 21). New Asian Security Concept For New Progress in Security Cooperation [Speech transcript]. Embassy of the People’s Republic of China in the Republic of Indonesia. https://id.china-embassy.gov.cn/eng/sgdt/201405/t20140530_2048472.htm

[11] Chen, X. (2024, March 28). Implementing the Global Security Initiative to build a world of lasting peace and universal security [Keynote speech transcript]. Ministry of Foreign Affairs of the People’s Republic of China. https://www.mfa.gov.cn/mfa_eng/xw/wjbxw/202405/t20240530_11343977.html

[12] ASEAN (Association of Southeast Asian Nations). (2019, June 22). ASEAN Outlook on the Indo-Pacific. https://asean.org/wp-content/uploads/2021/01/ASEAN-Outlook-on-the-Indo-Pacific_FINAL_22062019.pdf

[13] Heiduk, F. (2022, November). Security in the Indo-Pacific: The Asianisation of the regional security architecture (SWP Research Paper 11). Stiftung Wissenschaft und Politik. https://doi.org/10.18449/2022RP11