Global Risk Indexes (23-02-2025)

Global 99 (0 —)
MENA 99 ( —)
APAC 98 ( —)
Europe 99 ( —)
Africa 98 ( —)
AMERs 98 ( —)
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 on the Brink: Taiwan Crisis Worsens, South China Sea Flashpoints Expand, and Economic Battles Deepen

The past week has seen escalating geopolitical tensions across the Asia-Pacific, with military confrontations, economic battles, and political instability reshaping the regional order. The Taiwan crisis is worsening, China’s influence in the South China Sea is expanding, and North Korea is heightening nuclear threats. Meanwhile, economic shifts in India, Indonesia, and Southeast Asia are further contributing to uncertainty.

Taiwan Crisis: China’s Military Pressure and U.S. Arms Accelerations

China has intensified its military activities near Taiwan, with the largest naval and aerial incursions of the year. Beijing has expanded military drills near Taiwan’s air defense zone, signaling a clear warning to Taipei and Washington.

In response, the U.S. has fast-tracked arms deliveries to Taiwan, including precision-guided munitions, missile defense systems, and armored vehicles. Taipei is also accelerating its asymmetric warfare strategy to counter potential Chinese aggression. With both sides increasing their military posturing, the risk of direct conflict is rising.

South China Sea: China-Philippines and China-Vietnam Confrontations

China has escalated tensions with the Philippines, engaging in aerial confrontations with Philippine reconnaissance aircraft over disputed waters. Manila has condemned the incidents, raising concerns over potential military miscalculations.

At the same time, Vietnam has introduced a new maritime baseline claim, reinforcing its territorial rights in contested waters. This move is expected to trigger a strong diplomatic and military response from China, further heightening tensions in the region.

U.S.-China Economic Conflict: Trade, Capital Shifts, and Energy Decoupling

The U.S.-China trade war has expanded into new arenas, with China increasing offshore fund-raising in Hong Kong and Southeast Asia to bypass U.S. financial restrictions. Meanwhile, Washington is considering new tariffs on Vietnamese exports, raising concerns over potential economic ripple effects across ASEAN.

China has also deepened its energy realignments, reducing LNG and coal imports from the U.S. while increasing partnerships with Russia and the Middle East. These moves indicate a long-term decoupling in global energy supply chains.

North Korea’s Escalating Nuclear Rhetoric

North Korea has issued multiple threats, warning of “strategic countermeasures” in response to U.S.-South Korea military drills. Analysts believe Pyongyang is preparing for a missile test or nuclear demonstration as a show of force.

With tensions rising on the Korean Peninsula, the risk of military escalation remains high, potentially drawing in regional and global powers.

China’s Expanding Military Influence: Naval Drills Near Australia and New Zealand

China has conducted live-fire naval drills near Australian and New Zealand waters, signaling its growing military assertiveness in the Pacific. Wellington and Canberra have raised concerns over Beijing’s expanding naval reach, viewing these exercises as an attempt to challenge Western-aligned security structures.

Indonesia’s Political Instability and Economic Risks

Anti-government protests have erupted across Indonesia in response to budget cuts and economic policies. These protests, coupled with political corruption scandals, are increasing the risk of domestic instability in Southeast Asia’s largest economy.

India’s Media Crackdown and Economic Policy Shifts

India has fined the BBC for alleged foreign exchange violations, signaling greater government control over foreign media operations. This move has raised concerns over press freedoms and New Delhi’s tightening domestic policies.

Looking Ahead: A Region on the Edge

The Asia-Pacific is experiencing simultaneous security, economic, and political crises, with growing risks of unintended conflicts, financial fragmentation, and diplomatic realignments. The coming weeks will be critical in determining whether these tensions stabilize or escalate into broader confrontations.

Geopolitical Risk Assessment for the Asia Pacific
(23-02-2025)

The Asia-Pacific region has entered a highly volatile phase, with simultaneous military conflicts, economic warfare, and regional political instability. China’s growing military pressure on Taiwan and its aggressive actions in the South China Sea are escalating regional security threats, while the U.S.-China trade war is expanding beyond tariffs into financial and energy decoupling. North Korea’s nuclear rhetoric has intensified, increasing the likelihood of military provocations. Indonesia and India are experiencing domestic political tensions, with Jakarta facing anti-government protests and New Delhi imposing stricter media controls. Meanwhile, China’s naval drills near Australia and New Zealand signal a growing effort to challenge Western-aligned security frameworks. The convergence of these crises places the Asia-Pacific at high risk of strategic miscalculation, economic fragmentation, and regional confrontations.

Geopolitical Risk Index

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

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