As strategic competition between the United States (U.S) and China intensifies, the foreign policy choices and strategic autonomy of Indo-Pacific states, which increasingly find themselves caught in between the two major powers, are being directly affected. While seeking to maintain economic and security cooperation without becoming overly dependent on either side, regional states are facing growing pressure to preserve their room for manoeuvre.
To assess these developments, the Ankara Center for Crisis and Policy Studies (ANKASAM) presents the views of a Senior Lecturer in International Relations Nicholas Ross Smith on the effects of U.S-China competition on Indo-Pacific countries, the prospects for regional states to preserve their strategic autonomy, and the strategies they may pursue.
1. How is growing U.S-China competition reshaping foreign policy choices of Indo-Pacific states?
The most important shift is that U.S-China competition has become securitised and, consequently, the organising frame through which almost all regional foreign policy is now interpreted, whether states like it or not. Even initiatives that have little to do with the rivalry, such as trade diversification or development partnerships, are increasingly read through a binary lens of “leaning towards Washington” or “leaning towards Beijing.”
For most Indo-Pacific states, this has narrowed the perceived room for manoeuvre (they have long been hedgers) while paradoxically increasing their strategic value. Smaller and middle powers are finding themselves courted more intensely than at any point since the Cold War. Not only by the U.S and China, but also by third parties like the EU which are seeking to build coalitions. That courtship creates opportunities: more infrastructure financing, more security dialogues, more diplomatic attention.
But it also creates a psychological burden. In my research I emphasize the ontological (i.e. the deeper existential aspect) dimension of this competition: states are not just managing material risks but anxieties about identity and status. For instance, New Zealand’s debates over potentially joiningAUKUS Pillar II, or Southeast Asian discomfort with “choosing sides” rhetoric, are as much about who these states understand themselves to be as about capability calculations. The rivalry is forcing states to articulate, often uncomfortably, what their independence actually means in practice.
2. Can Indo-Pacific states balance their relations with Washington and Beijing without being drawn into the great power rivalry?
Yes, but “balance” is probably the wrong metaphor as it implies a static equilibrium that no longer exists. What successful states are actually doing is better described as hedging with active workarounds: maintaining productive relations with both powers while quietly building alternative channels that reduce exposure to either.
The evidence from Southeast Asia speaks to this already happening. States like Vietnam, Indonesia, and Malaysia have refused to treat the rivalry as a binary choice, instead compartmentalising their relationships: economic engagement with China, security cooperation with the U.S, and diplomatic energy invested in ASEAN centrality and minilateral groupings. This is not fence-sitting; it is a deliberate strategy of preserving optionality.
The caveat is that this space is shrinking at the margins. Technology policy is the clearest example: semiconductor controls, 5G decisions, and data governance increasingly force discrete choices where hedging is difficult. And the more securitised the region becomes – and the more issues get framed as existential – the harder compartmentalisation gets. So the answer is a qualified yes: autonomy is preservable, but it requires constant, active diplomatic work. It is not a default condition that states can passively enjoy; it must be continuously manufactured.
3. What strategies can Indo-Pacific states adopt to preserve their strategic autonomy without becoming overly dependent on either Washington or Beijing?
I would highlight four. First, diversification beyond the binary. The most effective hedge against U.S-China dependence is deepening ties with third partners, especially the EU which is trying to be extremely proactive in the Indo-Pacific. My research on EU engagement in the Indo-Pacific suggests regional elites genuinely want Europe to be a more consequential player precisely because it thickens the strategic environment beyond a two-horse race.
Second, investment in regional architecture. ASEAN, the Pacific Islands Forum, and minilateral arrangements give smaller states collective weight they lack individually, and crucially provide venues where the agenda is not set in Washington or Beijing.
Third, there is the need for diplomatic workarounding: creative, often informal practices that let states cooperate with great powers on specific issues while sidestepping the parts of the relationship that would compromise autonomy. Much of the region’s most effective diplomacy happens in these improvised spaces rather than through formal alignment.
Fourth, and least discussed: domestic resilience. Strategic autonomy is ultimately underwritten by economic diversification, supply chain awareness, and societal cohesion at home. A state whose export profile or critical infrastructure depends overwhelmingly on one power has already lost much of its autonomy, whatever its declaratory policy says.
None of these guarantee immunity from great power pressure, but in concert they convert smaller states from rivalry’s objects into actors with genuine agency.
