The Shangri-La Dialogue once again reminded us that the Indo-Pacific remains one of the most strategically volatile regions in the world. But this year’s event was marked by a particularly sharp tone from US Defence Secretary Pete Hegseth, who described China as a “real and imminent threat”. His message was clear: the US will not retreat from the Indo-Pacific the same way it has deprioritised its presence in parts of Europe.

While not surprising, the statement has significant implications for how regional actors assess risk, security cooperation, and economic partnerships over the next 6–12 months.

The Indo-Pacific’s Fragile Balance

Hegseth outlined a threat environment shaped by Beijing’s military expansion and assertive behavior, especially near Taiwan and across the South China Sea. He made a strong case for bolstering collective defence in the region and called on Indo-Pacific allies to increase their defence budgets—implying that under President Trump, US protection would no longer be as far-reaching or unconditional.

This reflects a broader shift in US foreign policy: a move away from global security guarantees in favour of a more transactional, interest-based approach. And it’s pushing regional actors to reassess their own defence capabilities.

The likely short-term result? A more volatile and fragmented regional security environment, where incidents—such as ship-to-ship confrontations or airspace violations—become more frequent, even if open conflict remains unlikely.

China’s Strategic No-Show

China’s decision to send a lower-level delegation instead of Defence Minister Dong Jun was, in many ways, the most telling moment of the summit. It’s highly likely that this was a calculated move to avoid direct confrontation with the US and its allies.

But it also signals something else: a shift in Beijing’s strategic communication. Rather than contest US accusations directly, China is focusing on positioning itself as a more stable economic partner. Ahead of the Dialogue, China held its first trilateral meeting with ASEAN and the Gulf Cooperation Council (GCC), emphasising “vast opportunities” for trade and economic collaboration.

This approach may prove effective. Trump’s emphasis on transactional diplomacy has left several Indo-Pacific partners—particularly less traditional allies like Indonesia and the Pacific Islands—feeling exposed. For these nations, deeper economic engagement with China may seem more predictable, even if their security interests align more closely with Washington.

ASEAN’s Balancing Act

Southeast Asian leaders, for their part, were vocal about the need to avoid being caught in the middle of the US-China rivalry. Malaysian Prime Minister Anwar Ibrahim openly criticised US trade restrictions, arguing that economic openness is vital for regional peace and development.

Throughout the summit, ASEAN states reiterated a consistent message:

• Resist pressure to choose sides.

• Uphold multilateralism and diplomacy.

• Focus on inclusive growth and strategic autonomy.

Their stance reflects the broader challenge of navigating a multipolar world where security threats and economic interests are deeply entangled. As defence spending rises and alliances are tested, ASEAN is walking a geopolitical tightrope, trying to preserve its agency and regional unity.

What This Means for the Future

At Creolytix, we track these developments closely because they reshape the global risk landscape for our clients—governments, multinationals, and institutions alike.

For those operating in or engaging with the Indo-Pacific region, this moment calls for:

• Enhanced situational awareness of evolving risks, particularly in maritime corridors.

• Scenario planning that includes disruptions to trade, diplomacy, or infrastructure.

• Closer monitoring of geopolitical and defence policy shifts—especially in the run-up to US elections.

The strategic rivalry between the US and China isn’t just a diplomatic challenge. It’s a real-time operational risk, one that demands agility, insight, and preparedness.

To explore how Creolytix helps organisations monitor geopolitical risks like these in real time, get in touch with our team or book a demo at www.creolytix.io.