Global Risk Indexes (02-03-2025)

Global 99 (+1 ▲)
MENA 99 ( —)
APAC 98 ( —)
Europe 99 ( —)
Africa 98 (+2 ▲)
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: China-Russia Military Axis Strengthens, South China Sea Confrontations Rise, and Economic Fault Lines Deepen

The Asia-Pacific is experiencing a fundamental realignment of power, with military escalations, economic shifts, and diplomatic confrontations defining the regional landscape. The deepening of the China-Russia military axis, the increasing militarization of the South China Sea, and the rapid escalation of the U.S.-China trade war are driving a highly volatile geopolitical environment.

China and Russia’s Strategic Military Convergence: A New Cold War in Asia?

Xi Jinping and Russian Defense Minister Sergei Shoigu have solidified Beijing and Moscow’s military partnership, warning against NATO’s growing presence in the Indo-Pacific. The rhetoric signals a long-term shift toward greater military coordination between China and Russia, which could alter the balance of power in Asia.

With North Korea actively supplying weapons to Russia for the Ukraine war, Pyongyang is also positioning itself as a key player in this new alliance. This could result in Russian technology transfers to North Korea, accelerating Pyongyang’s missile and nuclear capabilities, which directly threatens Japan, South Korea, and U.S. military assets in the region.

If this trend continues, U.S. allies in Asia—particularly Japan, South Korea, and the Philippines—will be forced to deepen security cooperation, further polarizing the region into two competing military blocs.

South China Sea Flashpoint: The Philippines-China Standoff Escalates

The South China Sea remains a potential trigger for conflict, as China demands that the Philippines remove U.S. missile systems while escalating military activity near disputed waters. The latest intelligence confrontation between Manila and Beijing—where the Philippines charged detained Chinese nationals with espionage—has added another dimension to the dispute.

China’s growing military presence near Australia, where its naval drills disrupted civilian aviation, signals a broader expansion of Beijing’s military reach beyond its traditional spheres of influence.

If the Philippines continues strengthening military ties with the U.S., China may escalate with economic retaliation or hybrid warfare tactics—including cyber operations, disinformation campaigns, or maritime blockades.

The U.S.-China Trade War Expands: A Blow to Asia’s Export-Driven Economies

The trade war between Washington and Beijing has taken a new turn, with the Trump administration imposing additional tariffs on China, Mexico, and Canada. These measures could impact key Asian economies, including Taiwan, Vietnam, and South Korea, which rely on the stability of U.S.-China trade flows.

China’s possible countermeasures—ranging from retaliatory tariffs to export restrictions on rare earths—could further destabilize global supply chains, accelerating economic fragmentation along geopolitical lines.

Vietnam’s Economic Shift: Strengthening U.S. Ties and Military Procurement

Vietnam is aggressively securing new trade and defense agreements with the U.S., including arms purchases and economic partnerships like Elon Musk’s Starlink satellite service. This represents a strategic effort to reduce reliance on China while enhancing military deterrence capabilities.

However, Vietnam must balance this shift carefully—if it moves too quickly toward Washington, it risks Chinese economic retaliation, which could affect supply chains and trade routes.

Thailand’s Uyghur Deportation Fallout: A Turning Point in Southeast Asia’s Geopolitical Balancing Act?

Thailand’s decision to forcibly deport Uyghur refugees to China has triggered a severe diplomatic backlash from the U.S. and Australia. This incident underscores the growing pressure on Southeast Asian nations to choose between deeper ties with China or maintaining strategic autonomy.

Washington’s response—potentially reassessing military cooperation with Thailand—could push Bangkok further into China’s orbit, altering the region’s strategic balance.

Looking Ahead: A Region at Risk of Strategic Fragmentation

The Asia-Pacific is increasingly divided into competing economic and security blocs, with growing risks of trade fragmentation, military standoffs, and intelligence warfare. The next few weeks will be crucial in determining whether these conflicts stabilize or escalate into broader confrontations.

Geopolitical Risk Assessment for the Asia Pacific
(02-03-2025)

The Asia-Pacific region is undergoing a period of unprecedented geopolitical turbulence, with simultaneous military, economic, and diplomatic confrontations accelerating strategic shifts. The China-Russia alliance is deepening, with both nations strengthening military ties and opposing NATO’s expansion in the Indo-Pacific. Tensions in the South China Sea and near Taiwan are escalating, with China expanding military drills and the Philippines-China espionage standoff intensifying. North Korea is increasing military support for Russia, raising concerns about arms proliferation and Pyongyang’s access to advanced Russian military technology. Meanwhile, economic realignments are accelerating—Vietnam is securing major U.S. trade and defense deals, India is diversifying its critical minerals supply chains, and Thailand is facing diplomatic fallout from its forced Uyghur deportations. The U.S.-China trade war is expanding, with new tariffs threatening Asia’s export-driven economies. Given the rapid deterioration of regional security, the risk of strategic miscalculation, economic fragmentation, and military conflict remains critically high.

Geopolitical Risk Index

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

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