DPG Policy Brief

Balance of Power in the Indo-Pacific

Date: January 02, 2023

Global Environment and State of Play

Coming immediately after the traumatic shocks of Covid-19 affected 2021, the global power balance shifted dramatically in 2022.

The United States’ (US) withdrawal from Afghanistan in 2021 had put the US-led Western coalition on the defensive amidst perceptions of a US decline. In, 2022, the world was anticipating a period of relative peace and stability to deal with the global pandemic and its deep impact on global economies.

Russia’s invasion of Ukraine, on Feb 24, 2022, changed that expectation. It provided the US-led Western alliance an opportunity to reinvigorate NATO, rally the European Union (EU), and mount a combined challenge to Russia’s territorial invasion of Ukraine. Apparently, the objective was and remains to incrementally marginalise Russia, militarily and economically, leaving the field free to deal with China which is seen as the foremost multi-dimensional challenge to US power and influence in the contemporary world order.

This has resulted in two important benefits for the US. First, it has paved the way for US unipolarity, by re-energising a somewhat moribund NATO as a countervailing power in Europe. Through unilateral sanctions against Russia, supported by its allies and partners, America has emerged as the most dominant actor, shaping the global economic order and trade. Resultantly, a US-led NATO alliance and its allies in the Indo-Pacific, have emerged as a major force of power and influence against Russian assertions in Europe and China’s in the Indo-Pacific, under the rubric of maintaining rule-based global order. 

Russia and China, concerned with the threat posed to their core interests by the US led international order, are coming together to deal with the gathering storm. For Russia, it is the Western bulwark, characterised by NATO’s progressive ingress towards its borders, that poses an existential threat. China on its part is concerned with the US-led containment and confrontation strategy that aims at constraining both China’s rise as a peer competitor and its strategic space along the Indo-Pacific rimland. Although the primary architecture of this partnership is Eurasia-centric, dedicated to ensuring regional peace and stability mainly through the auspices of the Shanghai Cooperation Organisation, it is also moving towards the maritime domain, particularly in Northeast Asia, where both nations are involved in multiple maritime exercises.

Indo-Pacific is increasingly becoming central to great power competition. Seen in the above context, there is emergence of two blocs in terms of distribution of global power and influence, reviving old geopolitical theories.  The US-led West is seeking dominance over maritime space from the Atlantic, to the Indo-Pacific in line with Alfred Mahan’s thesis of control of commercial sea lanes. On the other side is the China–Russia combine dominating the Eurasian heartland, in concert with Mackinder’s hypothesis of control over the heartland as the basis for global dominance. In this correlation of power dynamics, the central competition is essentially over Spykman’s thesis of control over the rimland, from the Mediterranean to the Indo – Pacific.

Sandwiched between the two blocs are the unaligned countries and the Global South, which, being the most impacted, are attempting to assert their own influence to check the big powers in their selfish pursuit of self-interest.

The map below highlights the relative global distribution of power in terms of areas of dominance and influence.
 

Overview of Emerging Power Dynamics

Let us now examine the relative power assertions of the two blocs, together with their relative impact.

Western democracies, as highlighted, essentially dominate the maritime space across the Atlantic and Pacific Oceans. The US as a major power is not territorially involved in any of the regional conflicts be it in Europe, Asia, or the Middle East. America is essentially a global offshore influencer leveraging its military and economic influence through allies, partners, and institutions, which are central to its power projection.

The Sino–Russian alliance on the other hand dominates the continental space, stretching across Eurasia to Asia. Unlike the US, they are directly enmeshed in a series of regional conflicts which have political, economic, and military impact besides regional and global implications. Driven by a mounting challenge from the West, they are incrementally making inroads into the maritime domain, particularly in the Indo–Pacific.

The third element is the impact of the Ukraine conflict. Importantly, protracted conflict is not only impacting the security dynamics of Europe but also of the entire Western hemisphere. Similarly, the standoff over Taiwan, and mounting US support, is heightening chances of escalation which could break into open hostilities between China and the US. In addition to apparent security dynamics, these developments are having a serious impact on the global economy and supply chains, with energy and grain markets being disrupted.  The end of 2022 presents the possibility of the global economy heading into a recession together with a serious rupture in supply chains deeply impacting unaligned powers and the Global South.

Next, is the impact of the nine-month war and sanctions, which will possibly determine the US/NATO strategy of war termination. There is no doubt that the war has profoundly diminished Russia’s military power and regional influence. Nonetheless, Russia remains a major nuclear power with intrinsic resources, manufacturing capacities and strategic technological capabilities. It is difficult to geographically contain or strategically marginalise Russia. “Peace on what Terms” remains a critical dilemma for the West. If the conflict is not contained, and war continues, exacerbated by the provision of advanced and sophisticated weapons, there are serious possibilities of escalation and enlargement of conflict, engulfing the whole of Europe that could also spill over into the maritime domain.
 
In so far as China is concerned, Xi’s peaceful transition to a third term has been a major event impacting global and Asian geopolitics. Xi has centralised power with die-hard loyalists as his Politburo colleagues. The erstwhile slogan of ‘opening and reform’ has been side-lined. His governing style indicates deep ambitions to unify Taiwan, hostility towards the US, combined with close partnership with Russia. All are aimed to alter the US-dominated world order through geopolitical interventions, backed by its military and economic power.

As Xi promotes his grandiose dreams, the reality is that China is facing political, economic, and social headwinds. To consolidate political control, Xi is increasingly focusing inwards, and pursuing a state-led strategy of economic and technological management, together with the equitable distribution of social and economic benefits.  This over the medium term could have serious ramifications on China’s internal stability and regional influence, impacting its flagship projects like BRI and could even lead to flight of capital and business. 

The deteriorating security environment in Europe and Asia and the severe impact of sanctions (economic and technological) and supply chain disruptions is bringing Russia and China together. Importantly, China has multiple raw material deficiencies such as energy, grain, and fertilisers for which it remains dependent upon Russia. Thus, despite China’s concerns over the consequences of its close partnership with Russia vis-à-vis its global ambitions, the relationship is only likely to grow if the multi-domain China-US competition intensifies, and China feels vulnerable or even marginalised.

In contrast to Europe and Eurasia, the Indian Ocean region for the moment remains less affected by big power contestation. Nevertheless, a storm is building in the Indian Ocean as China, in addition to its continental bellicosity, pursues an aggressive maritime strategy in a bid to secure its western maritime flank. 

Finally, the Middle East. The region is witnessing major power realignments. US relations with Saudi Arabia and Turkey are deteriorating, providing an opportunity to the Sino–Russian combine to strengthen their foothold. The recent China–Saudi-Arab-GCC summits, and multiple agreements signed therein signify China’s mounting inroads. Similarly, failure to revitalise JCOPA is pushing Iran towards not only possibly exercising its nuclear option but also advancing its relations with Russia. There are signs of a possible shift in the regional balance from the US-dominated Middle East to the China–Russia partnership. This over period could result in the emergence of a China–Russia–Iran–Iraq nexus that can extend into Central Asia. This axis can provide major control over energy supply chains, as also domination of continental and sea routes in the region.
 

Power Dynamics in Asia


Asia is not a homogenous construct as it combines continental, maritime and rimland space. The continental space is dominated by the Sino–Russian bloc, whilst the US and its allies and partners dominate the maritime domain. Critical, big power competition for exercising power and influence in Asia is ongoing along the rimland, which is the Indo–Pacific construct.  In these competitive power assertions, middle powers are forced to adopt balancing strategies in pursuit of their interests and regional stability.

Salient trendlines defining the contours of the emerging strategic balance in the coming year and beyond are outlined in succeeding paragraphs.
 
Fundamentally, the strategic balance in Asia will be defined by how the strategic competition and pervasive tensions between China and the US play out. The year was marked by heightened China–US tensions over multiple issues that included the Russia–China entente, China’s support to Russia, human rights issues in Xinjiang, trade and technology competition and attempts to diversify supply chains away from China to deny its overwhelming trade leverages. During the Biden–Xi meeting in Bali on the sidelines of the G20 Summit, some guardrails were attempted to be put in place, but both sides nonetheless remain deeply suspicious of each other.  China sees US attempts at containment and suppression, and its alliance-based approach (QUAD and AUKUS) as “power politics and bullying”[1]. The US on the other hand looks upon China attempting to carve out a Sino-centric Asia by undermining the Free and Open Indo-Pacific and rules-based order, as explicit attempts at undermining US power and influence.

This tug of war is marked by both sides attempting to gain strategic advantage over the other by enhancing their strategic space at the other’s expense. President Xi’s political consolidation has allowed him to become more assertive in pursuit of China’s national interests, initially focused on Asia, which is deemed as the springboard for China’s global power and influence.

US focus on Europe and involvement in Ukraine is seen as an opportunity by China to enhance its strategic footprints and influence, discernible by adopting an increasingly assertive posture all through 2022.

China’s activities have included repeated incursions along the LAC with India, even as the two-year-long standoff in Ladakh continues. These actions are backed by a continued force build-up, induction of additional forces and upgrading its air and air defence posture. Its attempts at salami-slicing tactics in Arunachal Pradesh, through attempted incursions in the Tawang sector, underscore its intent. There has also been a marked increase in China’s forays in the Indian Ocean, including deployment of research vessels to monitor missile tests.

Elsewhere in Asia, China has upped the ante on multiple friction points, resulting in a tenuous security scenario. Taiwan has remained the focal point of China’s aggressive intent, which has been exacerbated by Speaker Nancy Pelosi’s visit in August 2022. Against Japan, its intimidatory actions have included continuous breaches of the ADIZ around the Senkaku Islands, and threatening deployments that have included carrier strike group operations and long-range strike drills. A new normal was set by the combined Sino–Russian maritime exercises in the East China Sea.

In the South China Sea, the potential for conflict remains significantly high, given the contested nature of the waters and multiple claimants. Importantly, in these intimidating tactics, three of China’s five theatre commands (Western, Southern and Eastern) have been actively involved in operations that centred around their specific mission areas.

China’s attempts to shape the strategic space in the Indo-Pacific through its assertions and domination is the real cause of the US labelling China as a peer competitor and a regional hegemon attempting to dominate Asia as a step towards its global ambitions. For the US, China’s dominance of Asia is strictly unacceptable, as this will lead to a coalition of forces that can over time undermine America’s global hegemony. To deal with this challenge, the US is refurbishing its alliances and partnerships and augmenting its forces to constrain an aggressive and ascendent China in multiple domains.

In the above backdrop, the focus of the US and its allies during 2022 was to strengthen existing alliances and partnerships and present a strong and resolute posture against Chinese assertions. Towards this end, it undertook steps to beef up existing alliances (bilateral and trilaterals) by strengthening alliances with Japan, Australia and South Korea, and the strategic partnership with India.  The Quad’s soft security architecture is incrementally being shaped into a more robust security framework through initiatives like the Indo-Pacific Maritime Domain Initiative, establishment of a HADR partnership and commitment to invest $ 50 billion for quality infrastructure in the Indo-Pacific.   AUKUS as a trilateral alliance between Australia–UK–US was created to enhance military and strategic capabilities, essentially aimed at creating a strong pivot in the Western Pacific by boosting Australia’s strategic reach and by arming it with nuclear submarines and long-range strike capability. Further, to cement its western and eastern alliances, a re-energised NATO is sought to be pivoted to the Indo–Pacific, through regular maritime deployments.
Japan’s shift in security posture has been a major development of 2022, with major implications for security architecture in East Asia. In a series of documents that include a National Security Strategy, National Defence Security Strategy and Defence Build Up programme, Japan has announced the doubling of its defence outlays over next five years, making Japan the 3rd largest defence spender from 9th presently. The change in Japan’s posture, in addition to allowing Japan to field capabilities (including counterstrike) commensurate with other middle powers, will also assist in beefing up its overall regional defence posture.

An important issue, particularly from the Indian perspective, is that post withdrawal from Afghanistan, the US has lost almost all influence on the Eurasian continental land mass which includes Central Asia, South Asia, and continental SE Asia, much to the advantage of both China and Russia. This allows China to shape its domination over continental Asia through infrastructure and connectivity-oriented investments as part of BRI and Maritime Silk Road initiatives, together with military domination. Further, conversion of the South China Sea into a China-dominated lake has allowed it to create a wedge between the Pacific and the Indian Oceans, enabling China to dominate the rimland through a strong PLAN presence both in the East China Sea and the Indian Ocean, given the PLAN’s multi-dimensional maritime capability backed by credible AA/AD capacities.
 

India’s Perspective

Seen from India’s strategic calculus, the China–US competition remains Asia Pacific-centric owing to the East Asian centricity of US-led security architecture and China’s domination of the South China Sea. This has resulted in India being left as a stand-alone power in South Asia/IOR, to deal with the multi-domain China challenge.

This has some important implications for the US intention to dominate the maritime space of the Indo-Pacific and establish rules-based order. The following aspects need reiteration: 
  1. China’s domination of the South China Sea has created a disconnect between the Indian and Pacific Oceans. This allows China to engage both regions piecemeal.  Despite growing tensions over Taiwan, there has been no let-up in the India–China standoff, in fact intrusions have only increased.
 
  1. This disconnect and limited capabilities to address challenges in IOR – South Asia creates a dilemma in the mind of Indian planners over the commitment of its Indo-Pacific partners towards addressing India’s security concerns.
 
  1. As a result, India has little option but to develop capabilities and strategies to deal with both China and Sino–Pak collusion, in both conventional and nuclear domains.
 
  1. Adding to India’s security concerns is the instability in Af–Pak region – political, economic, and Islamist resurgence. We are also witnessing attempts by the US to re-engage with Pakistan and build up its capacities. This will only embolden Pakistan and make it risk averse. Regional turbulence is also radiating into Central Asia, extending the arc of insecurity and geographic challenges faced by India.

Shifting Strands of Global Nuclear Balance


The year 2022 marked a moment in world history where an assiduously cultivated global strategic balance post-1945 was on the verge of collapse. Bogged down in the Ukraine conflict, continuing US and NATO support for Ukraine, and consequent losses forced President Putin to assert that Russia will be forced to respond by all possible means, which led to placing its nuclear forces on an alert status. Even though better sense has prevailed thus far, given the continuous escalation of the conflict and unending Western support, chances of deterrence failure remain high, driven by differing perceptions in a game of brinkmanship.

Second, with the realignment of power blocs, there has been a concomitant reshaping of strategic geometry. Importantly both the blocs are modernising and expanding their nuclear capabilities. A world that was attempting to seek “global zero” and non-proliferation appears to be now espousing a doctrine of “nuclear war fighting”.

Asia, with the with maximum number of nuclear powers and conflictual relations, is at the center of new doctrinal thinking. The most important construct is China’s modernisation of its nuclear arsenal, close collaboration between nuclear powers in Asia (China and Pakistan), and North Korea posing a serious challenge to regional stability.
 
Adding to the above, China has embarked upon upgrading its nuclear capabilities from silo-based systems and antiquated nuclear command and control to a more modern and dispersed system, upgradation to digital command and control and the development of tunnels and underground firing positions across the country, to enhance the survivability. This is backed by EW systems based on space-based ISR. Further adding to instability is the shift in China’s nuclear posture from “No First Use (NFU)” to a more qualified one by linking it to “launch on warning” or “launch under attack”.

China is also resorting to increase in force structures, through an increase in the number and mix of weapons based on the perceived totality of threats, which includes the US and regional players, most prominently India. It is also expanding sea-based deterrence. China’s intent is to create an arsenal of 1500-odd weapons by 2035.

This proposed increase in number denotes a shift from “minimum” to “effective deterrence”, allowing China to mount an effective counterattack. China’s strategic response capability is being further enhanced by integrating a large conventional missile force capable of precision attacks.

In the absence of China being a signatory of the INF Treaty, and its growing medium-range and cruise missile capabilities, a regional arms race is being triggered, with the US contemplating the deployment of theatre nuclear weapons and strengthening its extended deterrence. 

Repeated missile tests and nuclear testing by North Korea is resulting in the country developing a potent nuclear force, causing greater regional instability, given the nature of that country’s leadership.

From the Indian perspective, these developments have profound significance. India’s nuclear capability is directly related to the China-Pakistan dyad. It has less compelling need of nuclear weapons for its conventional security. The core relevance of India’s nuclear weapons is to prevent escalation and miscalculation. Pakistan’s nuclear capability on the other hand is totally India-centric, based on the belief that these weapons provide an indispensable guarantee for its security.

In terms of the nuclear threat from China, although its focus remains on the East Asia theatre, India remains in its crosshairs given it’s improving strategic capabilities. Nuclear targeting of India is a reality, which will get intensified with China’s induction of more accurate and sophisticated systems. 
 

Broad Conclusions: Prognosis for 2023

  1. Post Xi’s anointment, China remains both assertive and uncompromising.  US–China relations will remain on a slow boil, could get exacerbated over Taiwan, technology denial or attempts to shift supply chains.
 
  1. US has boosted strategic alignments in Europe and attempts to shape the global security, economic and trade narrative.  This is allowing China to consolidate its strategic space in Asia and leverage its economic and trade salience with G7 and middle powers to beat back attempts at China isolation. 
 
  1. The more isolated China feels, greater will be the substance of the Sino–Russian axis.  This will also result in greater collaboration between the two in strategic security and economic space.
 
  1. Indo–Pacific is likely to see continuing tensions, with a predisposition for escalation. Deteriorating internal dynamics or economic slowdown in China can lead to escalation.
 
  1. In the absence of a strategic focus, the Quad is weighed down by too expansive an agenda. The full potential of Quad can only be realised based on a credible security agenda and contributions to regional security architecture.
 
  1. An assertive China confident of Russian and North Korean support can raise the ante to test US and allied resolve – a scenario directly linked to ongoing developments in Ukraine.
 
  1. A factor favouring the Sino–Russian combine is that with the US remaining committed in Europe, its ability to support dual containment strategy will be severely challenged.
 
  1. China looks at India as an emerging power, whose close partnership with US-led Indo-Pacific security architecture is seen as a constrictive factor in its maritime breakout strategy into the Indian Ocean, an area which remains a critical vulnerability. 
 
  1. Deeply concerned with its vulnerabilities, China is seeking land corridors along India’s periphery, including in Myanmar, Bangladesh, Pakistan. In addition, it is seeking bases and places in West Asia and the Eastern Coast of Africa. 
 
  1. Against India, China will continue to adopt a containment strategy aimed at increasing political and economic costs. All attempts will be made to shape a political discourse which results in a fractious Indian polity. 
 
  1. The Indo-Pacific region will remain in flux, with jockeying for power continuing. An important element of this can be miscalculation of intent that could result in escalation.  In the prevailing scenario, it is important to coalesce middle powers in Asia (India–Japan–Australia–Indonesia–Vietnam, to name a few) to explore regional security architecture based on a “rules-based” order.
  2. In terms of strategic balance, robust deterrence equations are central to restraining thresholds of conflict. Given technological advances and improvements in its terrestrial defence systems, the propensity for counter force targeting by China will increase. India cannot be seen as ill prepared and vulnerable.
 
  1. India needs to develop robust and credible long range missile capabilities, as a form of strategic assurance. It cannot allow a situation that permits China to coerce India both in conventional and nuclear domains by wresting escalation control.

 
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[1] 2023: China’s year to reinforce Russia ties and repair links with Europe, Asia. South China Morning Post, 25 Dec 2022.