Global Risk Indexes (01-02-2025)

Global 98 (0 —)
MENA 96 ( —)
APAC 97 ( —)
Europe 99 ( —)
Africa 97 (-1 ▼)
AMERs 97 ( —)
Markets 99 ( —)
Mei Ling, Asia Pacific region analyst at Worldwise Analytica

Mei Ling

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

Asia-Pacific at a Breaking Point: AI Tensions, South China Sea Confrontations, and Economic Uncertainty Drive Regional Instability

The Asia-Pacific is confronting a dangerous mix of economic volatility, technological rivalries, and military confrontations, with each development carrying profound implications for regional stability.

China's DeepSeek Faces Global Regulatory Scrutiny: The backlash against DeepSeek AI has intensified, with South Korea joining European regulators in investigating its data privacy practices. This escalating scrutiny underscores how AI is not only a technological race but also a geopolitical battleground. With China's AI ambitions facing growing resistance from the West and its allies, Beijing's ability to expand its digital influence is being constrained. These developments mirror broader tensions over the global AI order, as Washington and Brussels seek to curb China's technological rise.

Trump's Panama Canal Gambit Risks Global Trade Disruptions: U.S. President Donald Trump's threats to reclaim control of the Panama Canal, citing security concerns over Chinese influence, mark an unprecedented escalation in Washington's economic rivalry with Beijing. While Panama has dismissed Trump's claims, the mere possibility of U.S. intervention has rattled global markets. The potential for economic fallout, particularly if new shipping restrictions are imposed, adds another layer of uncertainty to an already fragile global trade system.

South China Sea Confrontations Reach a Boiling Point: Philippine President Ferdinand Marcos Jr.'s sharp rebuke of China's aggressive actions, demanding an end to maritime harassment in exchange for the withdrawal of U.S. missile systems, highlights the deteriorating security environment in the South China Sea. Manila's call for Beijing to stop laser attacks, water cannon incidents, and territorial encroachments reflects deepening frustration with China's assertiveness. Meanwhile, China's rejection of international arbitration rulings continues to fuel tensions, raising the risks of direct confrontation.

Myanmar Junta Extends Emergency Rule, Ignoring Regional Pressure: Myanmar's military government has extended its state of emergency for another six months, dashing any remaining hopes for a return to democratic rule. With the junta pushing ahead with elections widely seen as illegitimate, ASEAN's diplomatic leverage is being further undermined. The worsening humanitarian crisis, combined with armed resistance and international isolation, suggests that Myanmar is sinking deeper into prolonged instability, posing security risks for neighboring countries.

Pakistan's Balochistan Conflict Escalates Amid Separatist Violence: The deadly clashes between Pakistani security forces and Baloch insurgents highlight the ongoing instability in the region. With Islamabad struggling to maintain control, the province's strategic importance'given its proximity to Iran and Afghanistan'has drawn increasing geopolitical attention. If violence continues to escalate, regional actors, including China with its Belt and Road investments, may be forced to reassess their engagement in Pakistan.

Philippines-U.S. Summit Set to Address Immigration and Security: President Marcos Jr.'s upcoming meeting with Trump signals a pivotal moment in U.S.-Philippines relations. While discussions will focus on immigration'particularly the fate of 300,000 undocumented Filipinos in the U.S.'the broader context involves Manila's role in countering China's South China Sea ambitions. The summit is likely to reinforce Washington's commitment to its regional allies, but it may also expose fault lines if U.S. policies fail to align with Philippine priorities.

Thailand's Economic Slowdown and Policy Dilemmas: Thailand's economic outlook has weakened further, with growth projections now below 2.9% due to disappointing consumption figures. Despite massive government stimulus programs, the central bank has warned that fiscal policies are failing to generate sustained growth. The prospect of further economic stagnation raises concerns about Thailand's ability to remain resilient amid global uncertainties.

Taiwan's Vatican Outreach Highlights Diplomatic Challenges: President Lai Ching-te's appeal to the Vatican for Taiwan's inclusion in global organizations reflects Taipei's continued struggle against Beijing's diplomatic isolation campaign. With only 12 formal allies remaining, Taiwan's ability to maintain global recognition is shrinking. However, growing international consensus on cross-strait stability gives Taipei leverage in pushing back against Chinese diplomatic coercion.

The Asia-Pacific's trajectory remains precarious as economic, technological, and security challenges intensify. The region's ability to avoid further escalation will depend on strategic diplomacy, economic resilience, and multilateral engagement to address these intersecting crises.

Geopolitical Risk Assessment for the Asia Pacific
(01-02-2025)

The Asia-Pacific remains a volatile region, with escalating tensions in trade, security, and governance. The convergence of AI competition, military buildups, economic uncertainty, and political maneuvering underscores the urgency for strategic recalibration and multilateral cooperation to prevent further destabilization.

Geopolitical Risk Index

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

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