Intensifying Military Competition in the Taiwan Strait and Western Pacific and the Spread of ASEAN Hedging: A Geopolitical Risk Analysis

Executive Summary

The prolonged Iran conflict has led to the departure of U.S. aircraft carrier assets from the Western Pacific, creating a vacuum in the Asia region with no U.S. carriers present. This is not a result of Washington deliberately neglecting Asia but rather a structural problem stemming from the physical limitations of covering two theaters simultaneously with a robust posture. Observing this vacuum, China has responded to Taiwan's Han Kuang exercises in an unpredictable manner, departing from its previous patterns, while Indonesia has expanded military cooperation with China, based on its nickel downstreaming structure, thereby strengthening its conditional hedging. This trend is more likely to unfold in a fragmented manner, with different paces for each country, rather than spreading uniformly to other ASEAN nations like the Philippines and Vietnam. South Korea is at a point where it must reassess its practice of depending on U.S. force deployment schedules for its security and manage the dual risks of abandonment and entrapment through a three-pronged strategy: establishing an independent monitoring system, pursuing bilateral diplomacy with individual member states, and decoupling its security and industrial responses.

I. Issue Analysis

Intensifying Military Competition in the Taiwan Strait and Western Pacific and the Spread of ASEAN Hedging: An Issue Analysis

1. Background and Developments

The constitutional basis of Indonesia's foreign policy is the non-aligned principle of being "free and active (bebas dan aktif)"[2][8]. President Prabowo Subianto has repeatedly emphasized this principle since his inauguration, vowing to maintain friendly relations with all countries, including China and the United States[2][8][11].

This principle was put to a practical test on August 19, when the Indonesian naval frigate KRI I Gusti Ngurah Rai conducted joint exercises with a People's Liberation Army Navy vessel in the waters east of Taiwan[2][8]. These drills coincided with Taiwan's annual Han Kuang exercises. For ten days in August, Taiwan conducted the Han Kuang exercises, which simulated an all-out war with Beijing, including scenarios involving a blockade, attacks on critical infrastructure, and internet outages[1].

During the same period, a change was detected in China's response. Beijing refrained from official comment until the final day of the exercises. The subsequent comment was limited to a brief, dismissive remark calling them a "wasteful show"[1]. This was a departure from its previous pattern of responding with large-scale counter-drills[5]. It can be interpreted as a unique tactic of ambiguity, making the timing and intensity of its reaction unpredictable[5].

Indonesia's approach to China is intertwined with its nickel downstreaming policy. The structure in which China has filled the capital and technology gap required for downstreaming is cited as the background for this expansion of military cooperation[2][8]. In Jakarta, Indonesian Defense Minister Sjafrie Sjamsoeddin requested an expansion and enhancement of joint exercises with China during a bilateral meeting with his Chinese counterpart, Dong Jun[9]. Beijing responded by offering technology transfers and expanded defense industry cooperation[9].

2. Current Situation

At the China-Indonesia 2+2 dialogue (foreign and defense ministers) held in Jakarta on August 21, the two countries agreed to expand military cooperation and launch a five-year action plan[2][13]. Chinese Foreign Minister Wang Yi stated, "We must not miss the opportunity," signaling his intention to deepen cooperation in minerals, energy, and technology[11]. The Global Times described the dialogue as "firm mutual support on core interests," emphasizing the deepening of strategic synergy[15].

Simultaneously, military movements in the opposite direction are underway in the Western Pacific. The United States, Japan, and Australia are scheduled to conduct an expanded "Oriental Shield 26" exercise from September 8 to 24[7]. The Global Times characterized this as a "typical example of bloc-based military exercises under the pretext of enhancing interoperability," criticizing it as an act that injects a confrontational framework and forward-deployed firepower into an already fragile Asia-Pacific security environment[7].

The problem is that this expanded exercise is taking place during a vacuum of U.S. aircraft carrier presence in the Western Pacific. As the prolonged Iran conflict extended the deployment of the USS Abraham Lincoln beyond 260 days, the U.S. Navy redeployed the USS George Washington from the Western Pacific to the Middle East[12][14]. Nikkei Asia reported that the George Washington arrived in the Middle East on Wednesday to be deployed for Iran-related operations[14]. This has created a vacuum in the Asia region with no U.S. carriers present[12]. The U.S. Department of Defense has not disclosed the deployment schedule for a replacement[12].

The South China Morning Post highlighted the potential ripple effects of the Indonesia-China exercise on other ASEAN member states. One regional observer assessed that the drill "could lower the political threshold for neighboring countries"[4]. The Council on Foreign Relations (CFR) diagnosed that ASEAN is losing trust in the United States. After observing U.S. policy moves in Asia in late July, skepticism about Washington's security commitments is reportedly spreading among regional governments[3].

3. Key Actors and Positions

The Prabowo administration in Indonesiais pursuing a dual strategy of maximizing practical benefits while maintaining non-aligned rhetoric[2]. This is assessed not as an ideological shift but as conditional hedging stemming from the nickel industry's structural dependence on China[2][8]. The Ministry of Defense is actively pursuing deeper cooperation, publicly requesting the enhancement of exercises with China[9].

Chinais leveraging military cooperation with Indonesia to secure a partner within ASEAN amid developments in the South China Sea and Taiwan Strait. Foreign Minister Wang Yi's remark that "we must not miss the opportunity" illustrates this intent[11]. On the Taiwan issue, Beijing is weaponizing unpredictability through a new response pattern of silence followed by a brief, dismissive comment on the Han Kuang exercises[1][5].

The United Statesis facing the limits of its carrier force's ability to operate in two theaters simultaneously due to the prolonged Iran conflict[12]. While this vacuum is seen as a result of structural constraints rather than a deliberate neglect of Asia by the Trump administration, it could consequently incentivize China to expand its activities in the Taiwan Strait and South China Sea[12]. At the same time, the U.S., Japan, and Australia are sending a signal of deterrence by expanding the Oriental Shield 26 exercise[7].

Other ASEAN Member Statesare closely watching Indonesia's case. The general assessment is that this pattern is unlikely to spread uniformly to the Philippines and Vietnam, which are parties to the South China Sea dispute[2]. The spread is more likely to be fragmented, with different paces for each country[2][8].

4. Key Issues

First is the issue of the credibility of U.S. simultaneous multi-theater readiness. This case, where the prolonged Iran conflict led to a force vacuum in the Western Pacific, is fueling regional skepticism about whether Washington can handle the Indo-Pacific and the Middle East at the same time[3][12]. The lack of transparency regarding the deployment schedule for a replacement carrier only deepens this skepticism[12].

Second, China's changing response tactics are undermining the effectiveness of existing early warning systems. Crisis assessment methods that have relied on visible indicators, such as large-scale incursions by military aircraft, are likely to show their limits in the face of Beijing's "reversed ambiguity"[5].

Third is the question of the speed and uniformity of the spread of hedging within ASEAN. Whether Indonesia's precedent will immediately lead to a region-wide tilt toward China or become fragmented according to individual national interests is key to gauging the future regional security landscape[2][4][8].

Fourth is the question of how much the discussion on defense burden-sharing among Asian countries can be concretized in this situation of vacuum and fissures. At a time when the credibility of U.S. engagement is wavering, substantive discussions on how middle powers, including South Korea beyond Japan and Australia, will contribute to providing regional security public goods are still in their early stages.

II. In-Depth Analysis

Intensifying Military Competition in the Taiwan Strait and Western Pacific and the Spread of ASEAN Hedging: An In-Depth Analysis

1. Root Cause: The Structural Limits of Simultaneous Theater Operations

The origin of this situation lies in the U.S. Navy's own aircraft carrier operational methods. The Navy has typically covered both the Pacific and Middle East theaters simultaneously by rotationally deploying three to four carrier strike groups. This rotation system is based on the premise that each carrier's deployment period is limited to six to seven months. The prolonged Iran conflict shattered this premise. With the USS Abraham Lincoln's deployment exceeding 260 days, the U.S. Navy could no longer ignore the deteriorating mental health of its crew and logistical problems[12]. Ultimately, it made the choice to divert its only available replacement, the USS George Washington, from the Western Pacific to the Middle East[12][14].

This decision should be seen not as a result of the Trump administration deliberately neglecting Asia, but as stemming from the physical limitations of its carrier force, which cannot cover two theaters with a robust posture at the same time[12]. However, the structural nature of the cause does not diminish the weight of the consequence. The very fact that Washington, which has espoused an Asia-centric strategy, has spent weeks without its premier regional deterrent asset—an aircraft carrier—raises questions about the priority of its security commitments in the region. The problem is that this is not a one-off vacuum. As the situation in the Middle East remains unstable even after the Islamabad Memorandum of Understanding[6], the U.S. Navy could be forced to make the same choice again if the issue of freedom of navigation in the Strait of Hormuz reignites. This is the background against which regional actors dealing with Asian security have begun to no longer take America's "dual-theater simultaneous readiness" as a given.

2. Structural Context

Security Structure: The Interplay of a Deterrence Vacuum and Gray-Zone Provocations

The change in China's response is highly suggestive as it chronologically overlaps with this vacuum. Beijing remained silent about the Han Kuang exercises until they concluded. The subsequent comment was limited to a brief, dismissive remark calling them a "wasteful show"[1][5]. This differs from the previous pattern of responding with large-scale counter-drills. This tactic, which makes the timing and intensity of the response unpredictable, diminishes the effectiveness of the visible early-warning indicators, such as large-scale military aircraft incursions, that countries in the region, including South Korea, have relied on[5]. The simultaneous occurrence of the carrier vacuum and this tactical shift supports the interpretation that China is observing the U.S.'s dual-theater burden and adjusting the intensity and form of its gray-zone pressure accordingly.

The expanded implementation of 'Oriental Shield 26' by the U.S., Japan, and Australia during the same period can be read as an attempt to fill this vacuum. However, the Global Times described it as a "typical example of bloc-based military exercises under the pretext of enhancing interoperability"[7]. Beijing's official line is that this is an act that injects a confrontational framework and forward-deployed firepower into an already fragile Asia-Pacific security environment[7]. A paradoxical structure is emerging where Washington's attempt to fill the carrier gap with expanded allied exercises is, from Beijing's perspective, being used as a justification for escalating tensions.

Economic Structure: Nickel Downstreaming and the Securitization of Resource Dependence

Indonesia's expanded military cooperation with China cannot be explained by security logic alone. The Prabowo administration's nickel downstreaming policy is built on a structure that relies heavily on Chinese capital and technology for the battery materials industry[2][8]. The fact that this economic dependence has led to a request for joint exercises at the defense minister level shows that Jakarta's hedging is a calculation of conditional self-interest rather than an ideological shift[2][8]. This is supported by the fact that Indonesian Defense Minister Sjafrie Sjamsoeddin directly requested the expansion and enhancement of joint exercises during his meeting with Chinese Defense Minister Dong Jun[9]. Beijing responded by offering technology transfers and expanded defense industry cooperation[9]. At the August 21 2+2 dialogue, they even agreed to deepen cooperation in minerals, energy, and technology and to launch a five-year action plan[2][13][11]. This structure, where security and economy are not separated but bundled as a single package, has the potential to offer similar incentives to other ASEAN member states.

Political Structure: ASEAN's Institutional Limits and Declining Trust in the U.S.

ASEAN has always been an organization that lacks a unified stance on China due to differences in security interests among its member states. The Council on Foreign Relations (CFR) assesses ASEAN as a "still 'toothless'" organization and points out that trust in the United States has noticeably weakened within ASEAN recently[3]. This decline in trust stems from a cumulative pattern rather than a single event like the carrier vacuum. As U.S. policy signals regarding the Taiwan Strait have been inconsistent, and as available forces have been repeatedly diverted to other theaters during crises, regional countries have begun to doubt the very premise of policy design based on Washington's security commitments.

3. Historical Precedents and Comparison with Similar Cases

The current situation is an example that exposes the difficulty for the United States to simultaneously maintain a strong readiness posture in multiple theaters, a pattern that has been repeated in the past. During the prolonged Vietnam War in the Cold War era, the U.S. had to reduce its resource allocation to the European theater, which sparked debates among allies about the credibility of U.S. commitments. Similarly, the Obama administration's 'pivot to Asia' policy in the 2010s faced criticism for the gap between rhetoric and execution, as the actual resource commitment was delayed by the response to the Syrian civil war and the rise of the Islamic State (IS).

What distinguishes this case from previous ones is China's response. In past periods of U.S. force vacuums, Beijing tended to maintain a relatively cautious attitude and refrain from direct provocations. This time, however, it has experimented with a new response model—a tactic of unique ambiguity[1][5]—while simultaneously pursuing tangible military cooperation through joint exercises with Indonesia[2][4]. This can be interpreted to mean that China, having observed and learned from U.S. structural constraints, has begun to employ more proactive gray-zone tactics. The South China Morning Post pointed out that the joint exercise with Indonesia could have the effect of "lowering the political threshold," suggesting the possibility of similar moves by other ASEAN members, including parties to the South China Sea dispute like the Philippines and Vietnam[4].

However, it is unlikely that this spread will proceed uniformly. The Philippines, as a direct party to the South China Sea territorial disputes, is deeply bound by its security treaty with the United States, and Vietnam has deep-rooted historical wariness toward China. As ASEAN member states have different levels of economic dependence on China and varying security calculations, the spread of hedging is more likely to unfold in a fragmented manner, with different speeds and forms for each country[2][8].

4. Key Variables Shaping Future Developments

The first variable is the timing and manner of the Iran conflict's conclusion. If the Islamabad Memorandum of Understanding leads to a final peace treaty that permanently restricts freedom of navigation in the Strait of Hormuz, the U.S. Navy will face a situation where it must permanently tie down significant forces in the Middle East[6]. This means the Western Pacific carrier vacuum could become a structured pattern rather than a one-time event.

The second variable is whether China's gray-zone tactics will cross a critical threshold. The tactic of unique ambiguity, which makes the timing and intensity of its response unpredictable[1][5], is currently assessed as more likely to become a constant, attritional pressure rather than leading to an actual physical conflict. However, the possibility of escalation into an accidental clash remains, depending on decisions regarding arms sales to Taiwan or the outcome of a U.S.-China summit.

The third variable is the pace of individual hedging by ASEAN member states. Countries with a structural dependence on specific resources or industries, like Indonesia's nickel downstreaming, have a greater incentive to expand military cooperation with China[2][8]. Whether this structural incentive operates similarly in other member states will be a variable that shapes the overall security landscape of ASEAN.

The fourth variable is how the United States attempts to fill this vacuum. The key point to observe in the coming months is whether expanding allied-centric exercises like 'Oriental Shield 26'[7] will function as a sufficient deterrent signal to offset the carrier's absence, or if, as the Global Times points out, it will have the counterproductive effect of highlighting a bloc-based confrontation and thereby increasing the incentive for non-aligned hedging among ASEAN countries.