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The 2025 Shangri-La Dialogue marked a subtle but telling shift in Indo-Pacific geopolitics. While the annual security forum retained its usual stagecraft between the United States and China, this year’s exchanges revealed a deeper disconnect: The zero-sum logic driving great-power rivalry contrasts sharply with the pragmatic, interests-based approach favored by many middle powers and small states.

The old binaries of a U.S.-centered liberal order versus a Chinese-led alternative are giving way to a more dynamic regional system. What is emerging is an Indo-Pacific defined by strategic pluralism — overlapping coalitions, differentiated institutions, and shared but flexible rules, a political order that privileges agency over alignment. Rather than choosing sides, many states are shaping the region’s rules and frameworks in ways that reflect their own strategic priorities, domestic constraints, and evolving threat perceptions.

The message to the United States and other great powers is clear: Indo-Pacific countries prefer flexible foreign policies that balance security, diplomacy, and regional agency. U.S. policymakers should therefore engage the region on its own terms, supporting plural arrangements rather than forcing exclusive blocs.

A Third Option

One of the most notable pushbacks against binary choice thinking came from French President Emmanuel Macron. He used his keynote speech to reject portrayals of the Indo-Pacific as a zero-sum battleground — a framing increasingly driven by U.S. and Chinese strategic narratives. Macron’s call for strategic autonomy, often associated with Europe’s efforts to break free from U.S.-dominated security structures, found broader appeal as a guiding principle for Indo-Pacific states seeking maneuver room between great-power rivals. Macron’s message suggested that France sees the Indo-Pacific as the new center of geopolitical gravity and a space where strategic autonomy is a necessity.

Of course, France’s presence in the region is not new. It has framed itself as a resident Indo-Pacific power for years, with steady naval deployments from the Indian Ocean to the South China Sea, and by virtue of its overseas territories. Macron’s vision presents France and Europe as a “third way” for regional states wedged between the U.S.-Chinese geopolitical competition. France’s Indo-Pacific strategy emphasizes defense ties with India, Australia, and Japan, grounded in high-end arms cooperation, joint exercises, and strategic dialogues. While Australia’s cancellation of the submarine deal in 2021 was a setback in bilateral relations, France continues to pursue Indo-Pacific security commitments with the remaining three countries and with other regional partners, emphasizing interoperability.

What stood out at Shangri-La this year was Macron’s sharper rhetoric stressing the end of non-alignment and advocating for a “coalition of independents” to resist “spheres of coercion.” This subtle change — from offering an alternative to the great powers toward rallying likeminded actors into a collective posture — was reinforced by the timing of his remarks, delivered at the conclusion of his official visits to Vietnam, Indonesia, and Singapore. Macron’s framing of collective security without choosing sides may resonate more with Southeast Asian audiences than the increasingly hard-edged binary narratives emerging from successive U.S. administrations.

Macron’s intervention contrasted with Washington’s approach. U.S. Defense Secretary Pete Hegseth’s call for America’s Indo-Pacific allies to raise defense spending to 5 percent of GDP, using NATO benchmarks, met with little enthusiasm. Though the need for both conventional and strategic deterrence against Chinese coercion is understood, the costs of alignment — economic, political, and strategic — are harder to ignore. Few Southeast Asian states will accept a securitized future dictated from outside, especially at the expense of domestic development or regional economic integration. Many regional watchers saw Hegseth’s call as security-heavy messaging overlooking the region’s broader priorities. Even Australia showed reluctance, with a March 2025 survey indicating only one-third of Australians supported increasing defense spending.

Malaysian Prime Minister Anwar Ibrahim, as the Association of Southeast Asian Nations chair in 2025, captured this tension clearly. While reaffirming the organization’s commitment to diplomacy and regional stability, he stressed that trade is a pillar of strategic security, not a soft-power luxury. Warning against “arbitrary trade restrictions,” Anwar highlighted how economic disruption, not military imbalance, is the primary security concern for many countries in the region. Singapore’s Prime Minister Lawrence Wong echoed this view, stating that Southeast Asia rejects zero-sum thinking and favors multilateral cooperation, emphasizing the regional bloc’s agency to “shape its own destiny.” This consistent perspective underscores the gap between how regional states define security and how the great powers frame it.

That gap is especially evident in regional perceptions of China. Australia, despite deepening strategic ties with the United States, views China as a complex and evolving challenge, avoiding labels that would imply direct military confrontation. In the Philippines, President Ferdinand “Bongbong” Marcos Jr. has adopted a more assertive stance in the South China Sea and expanded defense cooperation with Washington. Yet his long-term view is to preserve an independent foreign policy that balances security concerns with economic pragmatism.

Vietnam has recently upgraded relations with the United States, Australia, Japan, South Korea, Malaysia, and Indonesia to the highest diplomatic tier while simultaneously strengthening its economic ties with China. This dual-track strategy reflects Vietnam’s longstanding hedging posture, wary of both Beijing’s assertiveness and overdependence on any one partner.

Meanwhile, Indonesia, Malaysia, and Thailand continue to prioritize economic resilience and strategic autonomy, emphasizing regional stability over bloc-based competition. Indonesia, in particular, has stepped up security cooperation by signing a Defense Cooperation Arrangement with Washington in 2023 and a treaty-level Defense Cooperation Agreement with Australia in 2024, while maintaining its strategic autonomy by diversifying its trade and defense partnerships across the Indo-Pacific.

Economics is the common thread. Most regional states have significant trade and investment links with China, making outright strategic decoupling neither desirable nor feasible. Yet this balancing act is far from settled. In the Philippines, China relations became a lightning rod before the May 2025 mid-term election, with rising nationalist sentiment pushing for a more confrontational stance amid concerns about jeopardizing economic ties. In Australia, public distrust of the United States has surged with Donald Trump’s return to the presidency, raising fears of being abandoned by its major ally.

News about American arm-twisting of Indonesia — trading tariff concessions for closer security cooperation — points to the cautious position of many middle and small states. Their real challenge lies in navigating not just geopolitical tensions, but domestic pressures that make hedging more politically dicey than it appears. A National University of Singapore study suggests that economic opportunities and proximity are driving many Southeast Asian countries towards China, and Trump’s volatile tariff agenda may accelerate that drift by compounding doubts about America’s reliability.

That does not mean regional governments have greater faith in China. Beijing often prefers bilateral negotiations over multilateral mechanisms — notably in the South China Sea, where it has delayed the finalization of a binding Code of Conduct with the Association of Southeast Asian Nations for over two decades. It has also created parallel initiatives such as the Lancang-Mekong Cooperation framework and the Global Security Initiative, which critics view as attempts to fragment or sideline existing forums. This is part of a broader effort to reshape the regional — and even global — order on terms more favorable to China. Positioning itself as the center of an alternative network of influence, where relationships are often structured through bilateral channels and unequal partnerships, gives China greater control.

Yet this behavior is not uniquely Chinese. Trump, through his non-consecutive presidential terms, has sidelined a host of multilateral institutions by withdrawing from the Trans-Pacific Partnership and the Paris Agreement, skipping several Association of Southeast Asian Nation summits, and advancing transactional, bilateral deals that unsettle America’s longstanding regional partners. Taken together, these patterns suggest a broader reality: Both great powers are increasingly engaging with the region on selective terms, guided more by strategic utility than shared commitment to regional priorities.

Strategic Pluralism in Practice

In response, key regional players are deliberately pursuing multi‑vectored security strategies that seek to avoid binary choices. This includes a form of hedging: actively cultivating diverse partnerships to reduce exposure to great-power coercion. India, Japan, South Korea, and Australia are all applying this approach, adjusting military force structure, external partnerships, and industrial policy to expand strategic options and dilute coercive leverage. Together their choices are reshaping regional ordering away from the U.S.-Chinese binary toward a layered system of overlapping coalitions, flexible institutions, and issue-specific, selectively shared rules.

India

India stays formally non-aligned yet builds practical coalitions without signing mutual defense pacts. Its 2025–26 military budget is just under 2 per cent of GDP (about US$78 billion), prioritizing locally made kit under Atmanirbhar Bharat and Production Linked Incentive schemes, including a multibillion-dollar push for domestic semiconductor fabrication. New Delhi deepens work with the United States on critical technologies such as drones and jet engines, while keeping legacy arms and energy ties with Russia and expanding deals with France, Israel, Vietnam, and Singapore. It also leans on minilateral formats like the Quad and the India-France-Australia trilateral, plus logistics agreements and maritime domain awareness sharing with Australia and France to widen operational reach. The aim is clear: Deter China and keep India’s choices open by avoiding dependence on any single partner.

India’s military posture is matched by an economic security agenda built on self-reliance and selective coalitions. India is boosting domestic manufacturing in defense, semiconductors, and electronics to cut reliance on China and diversify away from Russia. With Japan and Australia, it participates in the Supply Chain Resilience Initiative to reroute critical inputs away from chokepoints. Connectivity plans such as the India-Middle East-Europe Economic Corridor are intended to bypass China-centric routes, even if timelines have slipped. India’s digital public infrastructure hardens cyber and financial systems at home and is promoted as a soft-power model to partners in Southeast Asia and Africa. The result is material autonomy: India can bargain harder because it is less exposed.

Japan

Japan remains a U.S. treaty ally but is investing heavily in its own capacity for a more active regional security role. Under its 2022 National Security Strategy revisions, Tokyo committed to doubling defense spending. With U.S. support, Tokyo is acquiring counterstrike capabilities, buying long-range strike assets, developing domestic stand-off capabilities, and upgrading missile defense. Simultaneously, Japan has widened security ties through the 2023 Reciprocal Access Agreement with Australia, the United Kingdom-Italy-Japan future fighter program, and deeper cooperation on cyber and emerging challenges with the European Union and NATO. Its Official Security Assistance and broader capacity-building in Southeast Asia provide patrol vessels, surveillance systems, and training, embedding Japanese standards and diversifying partnerships. This widens Japan’s influence without locking it into a single great-power script.

Japan pairs this defense build-up with an assertive economic statecraft program. The 2022 Economic Security Promotion Act gives the state tools to map and secure supply chains, protect critical infrastructure, and regulate outbound tech transfers. Billions of yen in subsidies support semiconductor resilience, including large packages for Taiwan Semiconductor’s facilities in Kumamoto. Japan also joins the United States and partners like India and the Netherlands in semiconductor diversification efforts, while its critical minerals strategy funds overseas investment and stockpiles with Australia and Vietnam. Through long-term development aid and security assistance, Tokyo ties infrastructure, maritime capacity and surveillance support in Southeast Asia to shared standards and transparency. ISEAS – Yusof Ishak Institute’s State of Southeast Asia surveys have consistently ranked Japan as the region’s most reliable partner, reinforcing that this blend of security assistance and economic statecraft is seen as dependable rather than overbearing.

South Korea

South Korea is gradually diversifying its security partnerships, while remaining deeply integrated into its alliance with Washington, especially through enhanced trilateral cooperation with the United States and Japan. Seoul’s 2022 Indo-Pacific Strategy articulates an ambition to become a “global pivotal state” by strengthening ties with the Association of Southeast Asian Nations, India, Australia, and Pacific Island countries, as well as European security partners. In 2025–26, Seoul will spend about 2.3 per cent of GDP on defense (around US$45 billion), investing in missile defense, counter-artillery systems, and space-based intelligence. Through the trilateral pact, South Korea now shares real-time North Korean missile data with the United States and Japan.

Seoul’s defense industry is booming: Tanks, howitzers, jets, and rocket systems are heading to Europe and Southeast Asia, turning industrial scale into diplomatic weight and revenue. Partnerships with the Association of Southeast Asian Nations, India, and European partners, as well as growing cooperation with NATO in cyber, space, and advanced technologies, broaden its network. The core aim is to avoid single-channel dependency and shape rules in multiple arenas.

Economic security is just as central for Seoul. With trade making up over 80 per cent of GDP, diversification is a security imperative. Alongside expanding global trade and investment, South Korea is deepening critical minerals cooperation with allies and partners, including the United States, Australia, Canada, and Central and Southeast Asian countries. This effort is considered the most comprehensive critical mineral diplomacy to hedge against disruptions linked to China. Exporting defense systems and green technologies helps South Korea secure long-term maintenance and training relationships with partners. By embedding itself in multiple tech and industrial ecosystems, South Korea cushions against shocks from any single partner or market.

Australia

Australia is tightening interoperability through AUKUS: nuclear-powered attack submarines and a suite of advanced technologies from undersea drones to quantum systems. Its 2024–25 defense spending was above 2 percent of GDP (about US$56 billion) and the 2024 Defence Strategic Review shifted priorities toward long-range strike and force posture. At the same time, Canberra has stabilized political and trade channels with Beijing after China lifted most coercive barriers. Meanwhile, Australia has intensified engagement through the Quad, the Association of Southeast Asian Nations Regional Forum, and the Pacific Islands Forum, using these platforms to stitch together security, economic, and diplomatic strands. The strategy is to maintain deterrence credibility while exercising greater agency across the neighborhood.

Australia’s defense integration is mirrored by a broad effort to harden and diversify its diplomatic and trade relations. This includes a free trade agreement with the United Kingdom, one with India, a Southeast Asia Economic Strategy, and a trade pact with the European Union in the works. Its Critical Minerals Strategy 2023–30 backs joint projects with Japan, Korea, India, and the United States to build resilient supply chains and reduce reliance on China.

Infrastructure and digital connectivity funding in the Pacific and Southeast Asia offers alternatives to Belt and Road finance. Tighter foreign investment screening and a 2023–2030 Cyber Security Strategy protect key assets at home. The effect is a wider spread of partners and instruments, even as trade with China resumes.

A Region Reorganizing

Together, these strategic choices — France’s advocacy for strategic autonomy, Southeast Asia’s economic pragmatism, China’s selective institutional engagement, growing nuance in partnerships, and the rise of flexible “minilateralism” — reflect more than a shift in regional power dynamics. They signal a deeper reorganization of the Indo-Pacific’s security and diplomatic architecture. To be sure, this is not a sudden pivot. The Association of Southeast Asian Nations’ founding commitment to neutrality and India’s non-alignment legacy both reflect longstanding resistance to bloc-based geopolitics.

What is different today is the intentionality. These practices are being made explicit, coordinated, and built into formal mechanisms. Multi-vectored foreign policies once operating quietly are now codified in strategies and initiatives: the Association of Southeast Asian Nations’ widening external partnerships, India’s trilateral dialogues, South Korea’s Indo-Pacific Strategy, and Australia’s simultaneous deepening of ties with Washington and a stabilized relationship with Beijing. In short, pluralism is no longer an accident of circumstance. It is policymaking by design.

As the cases above show, a growing web of overlapping frameworks now underpins how Indo-Pacific states are expanding their options for defense and security cooperation. What ties these initiatives together is intent: Many countries want meaningful cooperation without, or beyond, the binding commitments or exclusive expectations that come with formal alliances. This is not a rejection of traditional alliances, but a conscious move toward flexibility. For many governments, participating in multiple forums serves as risk management — a way to preserve autonomy, avoid overdependence on any single partner, and respond more effectively to a fast-changing strategic environment. In today’s Indo-Pacific, hedging has become an organizing principle of regional statecraft.

Yet this flexibility comes with trade-offs. A decentralized order built on overlapping platforms and fluid alignments can create ambiguity. Without a dominant power to enforce norms or red lines, the risks of miscalculation, fragmentation, or policy paralysis grow. At the same time, such a structure allows for more inclusive, adaptive forms of cooperation. The post-Cold War world of prescribed security models is giving way to one of negotiated coexistence — shaped less by superpower prescriptions than by the preferences and agency of middle powers and cross-regional coalitions.

To the United States and China, the message is clear: Bigger budgets and binary choice framing will not win the trust of middle and smaller powers. What is needed instead is a more flexible, responsive strategy that values diplomatic engagement, economic resilience, and regional leadership. The challenge for U.S. allies and partners is to embed pluralism into policy without sacrificing strategic coherence. In a region as diverse and dynamic as the Indo-Pacific, that may be the only sustainable way forward.

As recent headlines about the potential deadline of a U.S. review of the AUKUS pact show, even America’s closest partners are watching for signs of consistency. That review, routinely or not, has only reinforced concerns that long-term planning cannot hinge on singular, uneven relationships. What regional actors are building instead is a resilient, multi-anchored order — one negotiated rather than prescribed, layered rather than locked in.

The future of Indo-Pacific regional security will be shaped less by declarations and more by coalitions of practice. The challenge for the United States is not to direct that process, but to join it on more equal terms.

Vu Lam, Ph.D., is a political scientist at the University of New South Wales, focusing on Southeast Asian affairs. He has worked across research, policy and government sectors, and writes regularly on regional integration and Indo-Pacific strategy.

The views expressed in this article are the author’s own and do not reflect those of his workplace and affiliated institutions.

Image: Petty Officer 1st Class John Belino via U.S. Indo-Pacific Command