Global Risk Indexes (15-01-2025)

Global 96 (+1 ▲)
MENA 98 (-1 ▼)
APAC 98 (+1 ▲)
Europe 98 (+1 ▲)
Africa 90 (+3 ▲)
AMERs 98 (+1 ▲)
Markets 94 (+3 ▲)
Mei Ling, Asia Pacific region analyst at Worldwise Analytica

Mei Ling

Empowering minds, shaping decisions: Insights from the heart of geopolitics

Asia-Pacific in Crisis: Governance Challenges, Strategic Shifts, and Economic Uncertainties Drive Regional Volatility

The Asia-Pacific continues to grapple with intensifying challenges across governance, economics, and strategic competition, presenting significant risks to both regional stability and global power dynamics.

South Korea's Political and Economic Crisis: The arrest of President Yoon Suk Yeol marks an unprecedented chapter in South Korea's political history, with far-reaching implications for governance and institutional trust. The turmoil has weakened investor confidence, as evidenced by December's record foreign capital outflows and a sharp rise in unemployment to 3.7%, the highest in 3.5 years. These developments, coupled with rising import prices and inflationary pressures, threaten to erode Seoul's economic resilience at a time when its leadership role in the Indo-Pacific is critical.

China's Strategic Maneuvering Amid Domestic Challenges: Beijing's actions reflect a dual-track strategy of consolidating regional influence while addressing internal vulnerabilities. The pay cuts at key financial regulatory bodies aim to align with broader civil service reforms but may undermine morale within institutions critical to stabilizing China's slowing economy. Simultaneously, China's continued economic and strategic support for Sri Lanka through Belt and Road agreements highlights its effort to deepen ties with South Asia, countering India's growing influence. However, the ongoing ban on Thai sugar syrup exports underscores Beijing's use of economic leverage as a tool for geopolitical negotiation.

Heightened Tensions in the South China Sea: The Philippines-Japan-U.S. trilateral security mechanism demonstrates a united front against Beijing's assertiveness in contested waters. Manila's response to the deployment of China's \monster ship\ at Scarborough Shoal exemplifies rising maritime disputes, which risk escalating into broader regional conflicts. Japan's active role in providing maritime security support to the Philippines reflects its commitment to a rules-based order but adds to the complexity of managing Sino-Japanese relations.

India's Strategic and Economic Posture: New Delhi's emphasis on strengthening naval capabilities in the Indian Ocean region signals its intent to counter China's maritime expansion. Concurrently, India's burgeoning textile exports, spurred by Bangladesh's political instability, highlight its economic adaptability. However, the diversification of supply chains away from Bangladesh underscores the region's economic interdependence and the risks of governance failures.

Taiwan's Strategic Resilience: Taipei's enhanced surveillance of ships flying flags of convenience reflects its proactive measures against grey-zone threats, particularly after the suspected sabotage of undersea cables by Chinese-linked vessels. Taiwan's inclusion in the U.S. \tier one\ AI export framework underscores its importance as a trusted partner, yet also places it squarely in the crosshairs of Beijing's strategic ambitions.

As the Asia-Pacific region navigates this tumultuous phase, the interconnectedness of its challenges demands comprehensive and coordinated responses. Stakeholders must address systemic risks with a focus on resilience and adaptability to foster stability in an era of geopolitical and economic uncertainty.

Geopolitical Risk Assessment for the Asia Pacific
(15-01-2025)

The Asia-Pacific region faces a volatile mix of political upheaval, economic recalibrations, and strategic rivalries. The interconnectedness of governance challenges, economic shifts, and contested sovereignty demands careful navigation to maintain regional stability and global equilibrium.

Geopolitical Risk Index

Developments to Follow for the Asia Pacific (See All Global)

Previous Briefings

See all previous briefings