Global Risk Indexes (27-02-2025)

Global 98 (0 —)
MENA 99 ( —)
APAC 98 ( —)
Europe 99 ( —)
Africa 97 ( —)
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 Faces Intensified Military and Economic Pressures: Taiwan on High Alert, China-Philippines Standoff, and North Korea-Russia Military Ties Deepen

The Asia-Pacific region is at a critical inflection point, as military, economic, and political pressures continue to escalate. Taiwan is facing increased Chinese military activity, tensions in the South China Sea are worsening, and North Korea is expanding its military cooperation with Russia.

Taiwan Reports Increased PLA Activity Amid New Chinese Military Drills

China’s latest military drills near Taiwan have raised fresh security concerns, with Taipei reporting a surge in PLA aircraft and naval vessels near its coast. Beijing has dismissed Taiwan’s complaints as 'hype,' but the scale and timing of the exercises—just ahead of China’s National People’s Congress—suggest a deliberate effort to reinforce pressure on Taipei.

With Taiwan also detaining a Chinese-linked cargo vessel suspected of damaging an undersea cable, tensions are expected to remain high, with risks of further hybrid warfare tactics.

South China Sea: China Demands Removal of U.S. Missiles from the Philippines

China has formally demanded that the Philippines dismantle the recently deployed U.S. 'Typhon' missile system, arguing it undermines regional stability. Manila has not responded, but the move signals an attempt by Beijing to test the limits of U.S.-Philippines military cooperation.

With the Philippines increasingly aligning with Washington, China is likely to escalate both diplomatic and military pressure in the coming months.

North Korea Deploys More Troops to Russia Amid Expanding Military Ties

South Korean intelligence reports confirm that North Korea has sent additional troops to the Russian frontlines, specifically in the Kursk region. This follows earlier reports that Pyongyang had deployed over 11,000 soldiers to assist Russian forces in Ukraine.

The deepening military alliance between Moscow and Pyongyang raises concerns about potential Russian transfers of advanced weapons technologies to North Korea, which could further destabilize the Korean Peninsula.

Pakistan’s Economic Struggles: IMF Negotiations and Energy Sector Concerns

An International Monetary Fund (IMF) mission is set to arrive in Pakistan next week for a review of Islamabad’s $7 billion bailout program. While the government claims economic stabilization, the energy sector faces new disruptions as Pakistan renegotiates clean power contracts, alarming international investors.

The IMF’s assessment will be critical in determining Pakistan’s financial stability in the coming months.

New Zealand’s Diplomatic Tensions with China Over Pacific Naval Drills

New Zealand’s Foreign Minister has raised concerns over China’s recent live-fire naval exercises in the Tasman Sea, criticizing Beijing for failing to provide adequate notice. The incident follows broader concerns about China’s increasing military presence in the Pacific, particularly after the Cook Islands signed a strategic partnership with Beijing.

Wellington’s position underscores growing regional anxiety over China’s influence in the South Pacific.

Taiwan’s Economic Growth Forecast Lowered Amid U.S. Tariff Threats

Taiwan has revised its economic growth forecast downward to 3.14%, citing concerns over potential U.S. semiconductor tariffs. With President Trump considering a 25% import duty on Taiwan-made chips, Taipei faces increased economic uncertainty.

The outcome of U.S.-Taiwan trade negotiations will be crucial in determining the island’s economic trajectory.

Thailand Cuts Interest Rates to 2.00%, Signals Weakening Growth

The Bank of Thailand has cut its benchmark interest rate to 2.00%, citing concerns over slowing economic growth. The move comes amid government calls for stimulus measures to boost exports and weaken the baht.

The rate cut reflects the broader economic struggles facing Southeast Asia amid global trade uncertainty.

Looking Ahead: The Asia-Pacific Faces Multiple Unresolved Flashpoints

With military confrontations, economic disruptions, and diplomatic tensions intensifying, the Asia-Pacific region remains on high alert. The coming weeks will be crucial in determining whether these pressures escalate further or stabilize.

Geopolitical Risk Assessment for the Asia Pacific
(27-02-2025)

The Asia-Pacific region remains in a state of heightened geopolitical and economic tension, with security risks intensifying across multiple flashpoints. China's military drills near Taiwan have escalated concerns, particularly as Taipei reports an increase in PLA naval and air force activity. The South China Sea dispute is becoming more volatile, as Beijing demands the removal of U.S. missile systems from the Philippines while reinforcing its presence in contested waters. North Korea’s military engagement with Russia is deepening, with reports of further troop deployments to the Ukraine conflict zone. Meanwhile, economic uncertainties are mounting. Taiwan faces a downgraded economic forecast due to potential U.S. tariffs, while Pakistan's IMF negotiations highlight ongoing financial instability. In Australia, the government is reassessing the impact of U.S. aid cuts to Southeast Asia, signaling potential funding gaps for regional allies. Additionally, Thailand's interest rate cut reflects a weakening economic outlook, and New Zealand's tensions with China over recent naval drills have raised concerns about Beijing’s Pacific strategy. Given these converging pressures, the risk of strategic miscalculations, economic fragmentation, and military escalation remains extremely high.

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

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