It has become commonplace—almost trite—to argue that Asia is emerging as a new power center in the world. Policymakers and analysts point to China’s and India’s economic rise, Asia’s centrality to global supply chains, and, of course, US-China strategic competition and the risk of conflict. All of that is true, but it is also inaccurate. It misses the fundamental changes occurring in both the region and in the very nature of geopolitics today.
In truth, Asia’s rise is the story of a region becoming the center of geopolitics for the 21st century. Asian security, economic, technological, and ecological dynamics will define global affairs. Just as Europe was the center of geopolitics for the second half of the 20th century (both before and after the Cold War), Asia is rapidly assuming that role today. What happens in Asia will come to define geopolitics and what happens in the world will directly impact Asia. The nature of this interaction (i.e., between regional and global politics) is perhaps the most important variable in international affairs today.
Consider the facts. Asia is now home to half of the world’s 20 fastest growing economies, generates two thirds of global growth, and accounts for 40 percent of global GDP. Many Asian economies are at the center of global supply chains for the consumer and industrial technologies driving innovation and prosperity today. The core global trends of digitalization and green technologies are facilitated by innovations from Asian economies and are being adopted there more quickly than in the West. Moreover, 60 percent of the world’s population lives in the continent, and the size of Asia’s middle class (including China and India) is expected to reach nearly 2.3 billion people, or 65 percent of the world’s total by 2030. Indeed, Asians will constitute the largest share, some 88 percent, of the next billion people in the middle class.
Asia also accounts for seven of the 10 largest standing militaries in the world and seven of the nine nuclear weapons states (declared and undeclared), which includes the United States, China, Russia, France, India, Pakistan, and North Korea. The US has five formal treaty allies in Asia (including two with active territorial disputes with China) and currently deploys, including at Indo-Pacific Command in Hawaii, over 350,000 US troops in the region from across all armed services. The stakes for the United States are massive and growing.
During most of the 20th century, Asia was largely a price taker in global affairs. Regional economic, political, and strategic trends reflected many of the underlying Cold War dynamics. US-Soviet proxy competition flourished in Asia. In the 21st century, Asia has shifted from being a geopolitical price taker to being a price setter. Events in Asia now drive many of the dynamics at the heart of global affairs today, especially those related to great power competition, economic globalization (especially trade liberalization), technology innovation, ecological preservation, and the role of rules, norms, and institutions in guiding global affairs.
There is one immediate and consequential manifestation of this. The central strategic dilemma in Asian strategic affairs is rapidly becoming the central strategic dilemma in global politics: The tension between security competition and complex interdependence—economic, technological, and ecological—will come to define both Asia and global politics in this century, for states large and small. For most countries, managing relations with China are at the heart of this.
There is one immediate implication of Asia’s emerging centrality, as well. Asia will face some of the most profound strategic challenges in the coming years and will offer some of the most substantial opportunities. It is a region of both intense risk and extraordinary prospects. Asia is home to a concentration of high growth rates, numerous technological innovations, ample capital, and the political will to mobilize them. At the same time, Asia is an inherently unstable mix of old and new security challenges. Its history of grievances and rivalries runs deep and burns hot; both the Taiwan and North Korea issues are left over from the Cold War but remain active zones of possible conflict. More recently, US-China security competition in Asia is intensifying and could escalate to confrontation in numerous accidental or intentional scenarios.
The Central Dilemma
International politics is increasingly defined today by a central dilemma: how states manage the tensions between complex interdependence and security competition. No country wants to choose between interdependence (and the prosperity and innovation that comes with it) and their national security interests. But countries are finding that some choices must be made, especially as national security concerns rise in importance. This started in Asia with the rise of China and Europe quickly followed, after the Russian invasion of Ukraine. Asia is now the crucible for the evolution of these dynamics. Whether and how these policy choices evolve will shape Asia and the world in the coming years. The importance of domestic politics to this process of managing competing interests cannot be understated.
The origins of this dilemma go back a few decades. Globalization in the 1990s was defined by much higher levels of trade, investment, and financial linkages among countries all over the world. China was at the heart of this. The country became a top trading partner of the US, Europe, and most Asian economies, as it eclipsed Japan in 2010 to become the second largest economy. China also emerged as the center of global manufacturing, which drove the development of transnational supply chains, further linking countries and unleashing a new round of global prosperity. For most Asian economies, in the 1990s and 2000s the United States and Europe were still the critical sources of final demand for Asian exports, and the US dollar reigned supreme in a globally connected economy.
This interdependence quickly became technological due to the rise of numerous innovations in Asia (e.g., semiconductors) as well as the region’s mastery of complex supply chains critical to building consumer and industrial technologies. Even then, Asia’s technological innovations were deeply linked with the United States and Europe, which were home to the world’s top technology companies. The interdependence also became ecological with the recognition among policymakers and citizens about the damage caused by greenhouse gas emissions in Asia and the need to mitigate and adapt to climate change. The rise of middle-class populations in emerging Asia led to demands for cleaner air and water from their governments. Lastly, the growing interdependence across these domains has raised the stakes for maintaining stability as the security fates of countries in Asia become increasingly linked.
Just as interdependence in Asia has evolved, so has security competition. While competition is not new to the Asia-Pacific, it is intensifying, accentuating the central dilemma. Three trends have driven this new era of competition. First, the arrival of President Xi Jinping in 2012 led to a China that was more aggressive and assertive. Xi abandoned former leader Deng Xiaoping’s approach of keeping a low profile and reassuring the region about China’s rise. Xi is much more willing to use China’s economic and military capabilities to advance China’s interests, and he is much more willing to tolerate risk and friction to do so. The era of US-China strategic competition emerged on the back of this as the risk of great power conflict transitioned from a possibility to a probability.
Second, Asian leaders started invested in their own military modernization and they also began forging security partnerships with the United States and each other. This combination of what scholars refer to as “internal” and “external” security balancing strategies is as consequential as it is rare. Many Asian countries pulled the US closer to help deter Chinese coercion and aggression. Asian leaders found a willing partner in Washington, who saw China as challenging US power in Asia and making a bid for regional hegemony. The Obama “pivot” to Asia was born in the context of these events.
Third, at a global level, the full-scale Russian invasion of Ukraine in 2022 and China’s support for Russia fully confirmed that the United States and China possessed not only competing security interests, but also very different views of global order, underscoring that both Washington and Beijing were locked in a long-term strategic and ideological competition.
How is the dilemma between interdependence and competition playing out in Asia? The core impulse for most Asian leaders is to avoid choosing between the United States and China, but they also do not want China to dominate Asia. Most Asian leaders want to have their strategic cake and eat it, too. But it is not clear this is possible or sustainable. For most Asian countries, China has become more important to them economically and technologically, while the United States has become more important militarily, while still relevant economically and technologically. This has motivated economic and security strategies of diversification, resilience and optionality—trying to avoid the choice while reducing exposure to China. US security partnerships in Asia have grown on the back of this, but so have the security relations among Asian countries, fostering what Washington now calls a “lattice” structure.
In addition, when faced with hard choices, some countries defer to their security interests and decide to simply pay a cost with China. Japan, South Korea, and Australia have all done so, in part because of their American alliances and their domestic politics. These events have revealed that standing up to Chinese coercion is not fatal, at least not yet. Australia’s recent experience of surviving harsh trade sanctions from China is a perfect example, of this.
Most countries in Asia are actively trying to diversify from their heavy economic and technological reliance on China. They know it will not eliminate their vulnerabilities, but it will minimize China’s leverage over them. This process will take time and is probably inherently limited given the large gravitational pull of the Chinese economy. Interestingly, the recent slowdown in China and the growing appeal of investing in India, Vietnam, Indonesia, and other emerging markets has reduced interest in China and assisted the diversification process. Trade and security ties within Asia and among Asian nations, excluding China, are at an all-time high as well. Ironically, the process of this kind of intra-Asian economic and security integration—which can reduce some of China’s leverage—has the natural disadvantage of excluding the United States unless Washington steps forward with a new trade strategy for the region.
US and Chinese Reactions
US strategy toward Asia has shaped the evolution of this central dilemma and will continue to do so. The United States has been in Asia for 80 years, serving as both the major security provider as well as a market for Asian exports—a dual security and economic logic. This changed as China became the top trading partner for most Asian states and as China’s economy kept growing. Then China began to assert itself, reminding the region the value of a robust US role. The initial US reaction was to launch the first “Pivot Strategy” under President Barack Obama to reaffirm both the US dual role and its commitments. In essence, the US saw an opportunity to extend its hegemony over a changing region but a hegemony that was both welcome and needed (unlike in many other parts of the world). However, US domestic politics kept getting in the way. Obama’s pivot was materially constrained by Congressional budget cuts and Congressional ambivalence toward passing the Trans-Pacific Partnership (TPP) trade agreement.
President Donald Trump’s election in 2016 di not help. It created a new challenge for the United States by injecting a high degree of uncertainty, volatility, and even coercion into America’s Asia strategy. This lingers today. President Joe Biden came roaring back with both credible reassurances to traditional allies and new and creative architectures for its security partnerships across Asia, such as AUKUS (the Australian-British-American agreement to equip Australia with nuclear-propelled submarines) and the Quad (the regular “quadrilateral security dialogue” between the United States, Japan, India, and Australia). But it lacked one critical element: a credible economic strategy. America’s domestic politics reject trade and embrace protectionist industrial policy, denying US strategists an essential tool in the competition with China. The upcoming US presidential election in November will be the next turn of the screw, tightening or loosening US ties to a region struggling with its central strategic dilemma.
China’s strategy in Asia has been even more basic. At its core, China seeks regional hegemony, and it is using various tools to achieve it: fostering economic dependence, operationalizing military intimidation, and creating perceptions of China’s inexorable and inevitable rise. China deftly uses proximity, gravity, and momentum to create the conditions for de facto Chinese hegemony. China’s argument to the region is this: China is close, its economy and military are large, and it is rapidly growing. Thus, other countries have no choice but to defer to and, ultimately, to align with China. At the heart of this hegemonic pressure is its economic prowess; a pillar of Chinese strategy is to foster a sense of dependence where countries have no choice but to defer to Chinese preferences or suffer the economic consequences. Critical to China achieving this end-state is fostering the perception of the inevitability of China’s rise and of US decline. Chinese policymakers gleefully highlight US political dysfunction and its noisy elections to emphasize this point and, incidentally, to demonstrate the relative value of China’s political system. The recent slowdown in China’s economy is putting much of this under stress, if not puncturing it.
Europe’s Response
The evolution of these dynamics in Asia holds three implications for Europe. First, Asian policymakers and business leaders are deeply interested in Europe, perhaps more so than ever before. The economic, trade, and investment opportunities in the large market of the European Union fit neatly with the national strategies of resilience, optionality and diversification for most Asian nations facing the searing reality of the central dilemma outlined above.
There is a security logic as well. Following the Russian invasion of Ukraine and China’s alignment with Moscow, Asian leaders want Europe to assist with deterring Chinese predation, coercion, and aggression. In a world of uncertain and even volatile US commitments (i.e., under a second Trump presidency), possessing capable and willing partners from outside Asia is now a necessity. Europe is no longer a geopolitical luxury for Asian policymakers. In a world where countries do not want to choose between Washington and Beijing and do not want China to dominate, forging closer relations with Europe is one more alternative to achieve both realities.
Second, Asia is not just a region of great opportunity, but also one of profound strategic challenges—and challenges that can produce outsized global effects. There is a credible risk of armed conflict in at least three scenarios: Taiwan, North Korea, and the South China Sea. The region is experiencing a slow-motion conventional arms race, driven by anxiety about China and uncertainty about America. China is massively expanding the size of its nuclear arsenal, with direct implications for Europe’s two nuclear powers, the United Kingdom and France. China and Russia are also deepening an already extensive defense relationship, fueling China’s ambitions and enhancing Russia’s ability to threaten Europe. At both the EU level and in European capitals, it is high time for a European security strategy toward Asia that focuses on deterring aggression, undermining military coercion, and extending a rules-based order in the region. In today’s geopolitics, as Asia goes, so goes the world.
Third, China is rapidly becoming a central challenge for transatlantic relations, and all sides need to prepare for navigating this rocky landscape. There will be more pressure on Europe from Washington to both “de-risk” and “de-couple” from China, which is already difficult for European economies to accept. This could produce separate supply chains in some sectors, creating substantial economic and political friction. Depending on the trajectory of US-China relations, Washington may expect Europe to do more for its own defense so Washington can focus on China. China will seek to exploit any and all fissures and is already trying. US and European policymakers need to have their eyes wide open about the massive challenge of managing policy tensions with Washington on China. Clear expectations, strong communication, and meaningful coordination (even if modest) will be essential to navigating this gathering challenge to transatlantic cohesion.
Evan S. Medeiros is the Penner Family Chair in Asia Studies at The School of Foreign Service at Georgetown University. He previously served on the National Security Council staff as the Special Assistant to the President and Senior Director for Asia Affairs, for President Barack Obama.
