The Expansion of Oriental Shield 26 and U.S.-China Strategic Competition: Reshaping the Asian Security Architecture and South Korea's Response

Executive Summary

The expansion of the trilateral U.S.-Japan-Australia military exercise, Oriental Shield 26, is the product of a structural choice to offset resource constraints by shifting burdens to allies. This choice is producing divergent trajectories across regions, creating an asymmetry where exercises are expanding along the Japan-Australia-India axis while being shortened on the U.S.-South Korea axis. China's response targets not the military substance of the exercises but the bloc-formation framework itself, through which the U.S. is consolidating bilateral relationships into a multilateral network. Beijing is also differentiating its responses by region, including the Philippines, the South Pacific, and Northeast Asia. South Korea should neither misread the reduction in U.S.-ROK exercises as a sign of abandonment nor ignore it. Instead, it needs to establish an independent monitoring system to track the trend of multilateralization among the U.S., Japan, and Australia, while managing security messaging separately from concerns about participating in a bloc framework. In the medium term, Seoul should institutionalize channels for verifying the effectiveness of extended deterrence and refine its bilateral diplomacy with individual ASEAN countries. In the long term, it needs to establish a system for responding to security and industrial issues separately.

I. Situational Analysis

Situational Analysis: The Expansion of Oriental Shield 26 and China's Reaction

1. Background and Developments

The trilateral U.S.-Japan-Australia joint military exercise, Oriental Shield 26, was announced to take place from September 8 to 24 [1]. The Global Times characterized the exercise as a repackaging of "bloc politics" under the pretext of an interoperability drill [1]. The expansion of the exercise is set against the backdrop of the second Trump administration's push to reorganize the Indo-Pacific security network. This trend is an extension of the U.S. policy since 2023 of making bilateral exercises more multilateral and larger in scale [8].

The easing of constraints on Japan's security policy provides the institutional foundation for this expansion. Following the revision of its Three Principles on Transfer of Defense Equipment and Technology and its decision to acquire counterstrike capabilities, Japan is expanding military cooperation not only with the U.S. and Australia but also with India. The Japan Air Self-Defense Force is scheduled to conduct the "Veer Guardian 26" exercise with the Indian Air Force in Rajasthan, India, from September 9 to 21 [7]. The consultation between Japanese Defense Minister Koizumi and his Indian counterpart also took place within this context [7]. In the South China Sea, the Philippines, under the Marcos administration, has continuously expanded its defense agreements with the U.S. under the banner of "military modernization." The frequency of joint exercises, the number of bases accessible to U.S. forces, maritime patrols, and intelligence cooperation have all increased [4]. The U.S.-Philippines Mutual Defense Treaty will mark its 75th anniversary on the 30th of this month [4].

2. Current Situation

The Global Times directly criticized the expansion of U.S.-led multilateral exercises in two editorials. The first editorial described Oriental Shield 26 as an example of "injecting confrontation, forward-deployed firepower, and bloc politics into an already fragile Asia-Pacific security environment" [1]. The second editorial, marking the 75th anniversary of the U.S.-Philippines Mutual Defense Treaty, argued that "America's 'common defense' fails to provide the Philippines with tangible resilience" [4]. In a separate editorial, the same outlet labeled Manila a "puppet" over the Philippine government's investigation into Chinese-owned steel companies, strongly criticizing the U.S. military's encroachment into the economic sphere [18].

Dissent against this pro-U.S. stance is also palpable within the Philippines. Representative Antonio Tinio of the ACT Teachers party-list warned that an expanded U.S. military presence could make the Philippines a target for China in a Taiwan contingency [13]. In contrast, the Stratbase Institute supported the anti-China stance, defending the independent law enforcement authority of Philippine judicial and administrative bodies against foreign pressure [9]. This indicates that there are varying degrees of support for closer ties with the U.S. within the Philippines.

In Northeast Asia, a contrasting trend has emerged, with U.S.-South Korea combined exercises being scaled down. At President Trump's direction, the duration of the U.S.-ROK exercises was shortened from 11 days to 5 [15]. This decision coincided with the visit of Chinese Foreign Minister Wang Yi to South Korea [15]. However, separate trilateral exercises involving the U.S., South Korea, and Japan are scheduled under the pretext of deterring North Korea [16][17], showing that U.S. strategy in the Asia-Pacific is following divergent paths in different regions. In the South Pacific, a U.S.-led joint statement by 40 countries was issued following China's SLBM test launch in July, but China retorted that this was a double standard [11]. The Pacific Islands Forum had previously failed to adopt a statement condemning China due to its consensus-based decision-making and China's economic engagement [5].

3. Key Actors and Positions

China (as viewed through state media): The Global Times portrays the U.S.-Japan-Australia exercises and the strengthening of U.S.-Philippines defense cooperation as a single, interconnected containment strategy. The expansion of exercises is framed as a factor that "undermines regional stability," while the defense commitment to the Philippines is defined as an empty promise that "fails to provide tangible resilience" [1][4]. China's diplomatic line, as seen in its rebuttal of Western demands over the South Pacific SLBM test as a double standard [11], follows an asymmetric strategy of responding firmly to military pressure while maintaining channels for economic engagement [5].

United States: As evident from Under Secretary of Defense for Policy Elbridge Colby's remarks in Manila, the U.S. approach is a reallocation of resources predicated on allies increasing their own defense investments [12]. Amid the constraints of a National Defense Strategy that acknowledges an inability to respond to multiple threats simultaneously, building a networked security architecture connecting Japan, Australia, India, and the Philippines is being used as an alternative to fill force gaps [8][12].

Japan: Leveraging the easing of its defense policy constraints, Japan is pursuing a diversification strategy, expanding its partnerships beyond the U.S. and Australia to include India [7]. This aligns with Tokyo's independent interest in extending its network for checking China into Southeast and South Asia.

The Philippines: The Marcos administration has made deepening defense cooperation with the U.S. a national priority [4], but this has exposed domestic political fissures over the security benefits versus the risks of entanglement [13][9].

South Korea: Amid conflicting signals—the scaling down of U.S.-ROK exercises and the continuation of U.S.-ROK-Japan exercises—South Korea is in a wait-and-see position regarding the reshaping of the regional security architecture [15][16][17].

4. Key Issues

The first issue is whether the tangible deterrent effect of U.S.-led multilateral exercises or the "tension-creating" effect alleged by China is more conducive to regional stability. This is not merely a matter of interpretation; it directly influences the hedging strategies of ASEAN countries [2]. The second issue is that U.S. security commitments are being applied inconsistently across regions. A contradictory trend is underway, with exercises expanding in the direction of the Philippines and Japan while being scaled down on the Korean Peninsula [1][4][15]. The third issue, as seen in the case of the Philippines, is the domestic divergence in assessing whether strengthening U.S. defense commitments leads to tangible national security resilience or merely increases exposure to great power competition [4][13][9].

II. In-Depth Analysis

In-Depth Analysis: The Structural Background of the Oriental Shield 26 Expansion

1. Root Cause: A Shift to Resource-Constrained Alliance Management

The expansion of the U.S. Indo-Pacific security network is best understood as an attempt to offset resource constraints by shifting burdens to allies. The remarks by Under Secretary of Defense for Policy Colby in Manila make this clear. The second Trump administration's National Defense Strategy codified the premise that the U.S. "lacks the capacity to respond to multiple threats simultaneously" [12]. Increased defense investment by allies is presented as the means to implement this premise [12]. The fact that Deputy Secretary of Defense Feinberg at the same time requested defense contractors to ramp up production of key weapons systems shows that this structural constraint is not mere rhetoric [12].

This constraint leads to different choices in different regions. In Northeast Asia, U.S.-South Korea exercises were shortened from 11 days to 5 [15]. Conversely, in the direction of Japan, Australia, and India, exercises are being expanded and multilateralized [1][7]. This asymmetry means Washington is not pursuing a uniform pressure strategy across the entire region. It is a strategy of selective deepening, reallocating resources to allies with relatively more capacity in their own defense budgets and fewer political constraints. Behind Japan's emergence as the primary beneficiary and implementing axis of this reallocation are domestic institutional changes: the revision of the Three Principles on Transfer of Defense Equipment and Technology and the decision to acquire counterstrike capabilities.

China's logic of opposition also targets this structure. The Global Times contrasts the pretext of "interoperability training" for Oriental Shield 26 with the substance of "injecting confrontation, forward-deployed firepower, and bloc politics" [1]. This approach problematizes the bloc-formation framework symbolized by the exercise more than the military threat of the exercise itself. In its editorials on the Philippines, it also points to the gap between the formal continuity of the 75-year-old Mutual Defense Treaty and the substantive "lack of tangible resilience" [4]. Beijing's opposition is focused less on the scale of the exercises and more on thwarting the institutionalization process by which the U.S. is consolidating individual bilateral relationships into a multilateral network.

2. Structural Context

Security Structure: The Multilateralization of Bilateral Axes

Since 2023, U.S. Indo-Pacific strategy can be summarized as the "multilateralization of bilateral exercises and the large-scaling of their size" [8]. It is a project of weaving together the individual axes of the U.S.-Japan, U.S.-Australia, and U.S.-Philippines alliances into an irreplaceable network. The degree of completion of this project varies by region. In Northeast Asia, historical and emotional conflicts between South Korea and Japan have been an obstacle to trilateral missile defense cooperation [10]. In contrast, the U.S.-Japan-Australia axis has relatively less of this bilateral political friction, allowing multilateralization to proceed first. Oriental Shield 26 is the result of this expansion, built upon this structural advantage.

At the same time, this multilateralization is accompanied by fragmentation. The responses of ASEAN countries are not uniform. Indonesia conducted joint exercises with China near the Taiwan Strait, continuing its strategy of conditional hedging [2]. The Philippines strengthened its pro-U.S. alignment [4]. Even within the U.S. alliance network, the differing positions of Representative Tinio and the Stratbase Institute inside the Philippines show that disagreements over this alignment have not been fully resolved [13][9]. The structure is such that as the multilateral network expands, the divergence of national interests within it also grows.

Economic Structure: The Deepening of the Security-Economy Linkage

The case of the Philippines illustrates the pathway through which expanded security cooperation spills over into the economic domain. The Global Times framed the Philippine government's investigation into Chinese-owned steel companies as an extension of the U.S. military's "encroachment into the economic sphere" [18]. The Stratbase Institute's rebuttal that "no foreign government can dictate how Philippine agencies and courts enforce domestic laws" [9] signifies that the issue has already moved beyond a security frame to one of sovereignty and law enforcement. This contrasts with the case of Indonesia, which has expanded military cooperation with China based on its nickel downstreaming structure [2]. ASEAN countries try to manage security and economic issues separately in the context of U.S.-China competition, but in countries like the Philippines where security alignment has deepened, that dividing line is beginning to collapse.

Political Structure: The Constraints and Catalysts of Domestic Politics

The easing of constraints on Japan's security policy is a product of shifts in its domestic political landscape. South Korea, on the other hand, is on a different path. The fact that the U.S.-ROK exercises were scaled down at President Trump's direction at the same time as Foreign Minister Wang Yi's visit to Seoul [15] suggests that Washington's approach to alliance management is intertwined with Beijing's diplomatic schedule. However, the scheduling of separate trilateral U.S.-ROK-Japan exercises [16][17] shows that the U.S. is pursuing a dual-track approach, combining bilateral reductions with trilateral maintenance.

3. Comparison with Historical Precedents

The multilateralization of U.S.-Japan-Australia trilateral cooperation is not a new phenomenon. The formalization of the AUKUS nuclear submarine supply plan in the South Pacific, the security agreement with Papua New Guinea, and the U.S.-Pacific Island Country Summit in 2023 already showed a similar pattern [5][8]. At that time as well, China reacted by labeling the multilateral expansion of bilateral agreements as "bloc politics." The tone of the recent editorials on Oriental Shield 26 [1] is an extension of that. What is different this time is the addition of a new variable: the easing of Japan's domestic constraints.

The incident involving the SLBM test launch in the South Pacific offers another point of reference. In response to the U.S.-led joint statement by 40 countries, China retorted that it was a "double standard" [11]. The Pacific Islands Forum failed to adopt a condemnatory statement due to its consensus-based decision-making and China's years of economic engagement [5]. This case demonstrated that when the U.S. attempts to apply pressure through multilateral statements, the procedural constraints of regional organizations combined with China's economic leverage can dilute the effect. In the case of Oriental Shield 26, this counter-balancing pathway is not operative because it is a U.S.-Japan-Australia framework in which no ASEAN-level multilateral body is involved. This is one reason why China is relying on the relatively limited tool of media criticism.

4. Key Variables Shaping Future Developments

The first variable is the durability of Japan's domestic politics. Whether the easing of defense policy constraints will be maintained after a change in government will determine the long-term pace of expansion for the U.S.-Japan-Australia axis. The second variable is the direction of public opinion in the Philippines. If concerns of the type voiced by Representative Tinio spread, it could put the brakes on the Marcos administration's pace of alignment with the U.S. [13]. The third variable is the U.S.'s resource allocation priorities. If the contradiction between Under Secretary Colby's remarks and Deputy Secretary Feinberg's request for increased production [12] translates into actual force deployments, the asymmetry between reduced exercises in Northeast Asia and expanded multilateral exercises in the Indo-Pacific could become more pronounced. The fourth variable is the differing pace of hedging among individual ASEAN countries. It has not yet been determined whether Indonesia's style of conditional hedging will spread to other countries or if the Philippine model of close alignment will become the regional standard [2].