AUGUST 2025
SMALL STATES, STRATEGIC MOVES: NEW PATHS TO INFLUENCE IN THE INDO-PACIFIC
August has underscored the increasing challenges and evolving patterns of influence and partnerships across the Indo-Pacific. Incidents such as the collision between Chinese and Philippine vessels at Scarborough Shoal have increased the sense of vulnerability within the region, while smaller states from New Zealand to Fiji are staking out new roles in security, space, and maritime resilience. Meanwhile, India is deepening its footprint in Southeast Asia, with the Philippines emerging as a focal point for maritime cooperation and broader convergence.
This month’s briefs explore how these developments are reshaping regional dynamics. Our first brief examines India’s strategic partnership with the Philippines, highlighting a model of sovereignty-sensitive support and cross-regional collaboration. The second brief looks at New Zealand’s expanding role in the space domain, a reminder that even small states can influence contested arenas when strategic foresight and domestic policy align.
Across the Indo-Pacific, governments are continuing to navigate tariffs, domestic unrest, and rising great power competition. In South Asia, India is balancing US pressure with Sino-Indian rapprochement, while Nepal and Sri Lanka contend with domestic and diplomatic challenges. Southeast Asia faces maritime disputes, border tensions, and complex trade-offs in defence engagement. In East Asia, US-aligned partnerships are being tested by Chinese assertiveness, Taiwan’s political shifts, and South Korea’s pragmatic diplomacy. Meanwhile, Pacific Island nations are leveraging external support while asserting sovereignty in a strategically contested region.
With economic pressures, technological competition, and shifting alliances converging, the Indo-Pacific remains in a pivotal moment. 9DASHLINE remains committed to delivering the in-depth analysis necessary to understand these evolving dynamics.
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DRAWING A NEW INDIA–PHILIPPINES ARC OF MARITIME CONVERGENCE
By Eerishika Pankaj and Rahul Karan Reddy
The August 2025 collision between Chinese and Philippine vessels at Scarborough Shoal was more than a dramatic escalation in the South China Sea (SCS). It crystallised the vulnerability of Manila’s sovereignty, exposed Beijing’s growing assertiveness, and underscored why partnerships beyond existing treaty allies have become urgent. Against this backdrop, India’s deepening engagement with the Philippines is emerging as part of a broader Indo-Pacific arc of convergence that extends beyond bilateral ties.
For years, India confined its SCS posture to rhetoric — backing UNCLOS and freedom of navigation while avoiding direct involvement in disputes. That caution gave way in 2023, when New Delhi and Manila issued a joint statement calling on Beijing to respect the 2016 Arbitral Tribunal award. In 2025, the relationship had accelerated into the strategic domain, symbolised by the first bilateral naval exercise in contested waters and the elevation of ties to a Strategic Partnership. This is not simply another entry in India’s Act East record; it signals Delhi’s readiness to operate at the front line of the effort against maritime coercion.
What sets the Philippines partnership apart is immediacy. With Vietnam, India’s engagement has centred on energy exploration — politically important but economically marginal. With Indonesia, cooperation has focused on connectivity and access around the Malacca Strait. The Philippines sits at the point of greatest pressure from the People’s Liberation Army Navy, where coast guard and militia tactics have become routine. Here, India offers Manila credible tools: maritime domain awareness, service-to-service military ties, and even prospective cooperation on submarine infrastructure and undersea surveillance — capabilities smaller middle powers cannot easily acquire from major treaty allies without political baggage.
Regionally, this arc of convergence complements rather than competes with existing structures. For ASEAN, it demonstrates a sovereignty-sensitive model of external support, one that reinforces rather than dilutes its centrality. For the United States and Japan, India’s role can provide a welcome burden-sharing at a moment when Washington’s bandwidth is stressed and Tokyo’s security outreach in the region is growing. By helping to build credible resilience in Manila, India relieves some pressure on alliance partners and expands the pool of capable maritime actors in the Indo-Pacific.
China’s reaction will be critical to watch. Its insistence that “no third party should intervene” reflects more than diplomatic boilerplate — it reveals anxiety that external partners are eroding Beijing’s ability to isolate Southeast Asian claimants. If India’s partnership with Manila proves durable, it will not only redistribute deterrence but also set a precedent for cross-regional coalitions that constrain coercion without formal alliances.
* A longer version of this article is available here.
BEYOND MIDDLE EARTH: NEW ZEALAND STAKES ITS CLAIM IN THE SPACE DOMAIN
By David MacSweeney - Founder at 9DASHLINE
New Zealand is an unlikely entry on most lists of influential space powers. Yet in recent years, Wellington has been working to shift from being little more than a pragmatic launch site to positioning itself as a strategic actor in an increasingly contested domain. For a nation of just over five million, its national story is more often characterised by sporting achievement and images of Middle Earth. But its recent approach to navigating the space domain provides yet another opportunity to showcase how small states can operate within great-power competition.
Regularly omitted from global maps in favour of its much larger neighbour ‘across the ditch’, much to the annoyance of its citizens, New Zealand’s location and unique geography, when viewed through a space lens, affords it a significant advantage over and above many of its defence and intelligence partners. Its remote location, educated workforce, and uncluttered skies have for many years made New Zealand an attractive base for companies such as small satellite launch specialists Rocket Lab and Dawn Aerospace, while Tawhaki National Aerospace Centre has similarly become a significant hub for testing and innovation.
Despite its relatively low global profile, in recent years Wellington’s space activity has shifted from a largely commercial endeavour to one now firmly tied to the region’s geopolitics. In July, Judith Collins — who currently holds the role of Minister of Defence and Minister for Space — announced the revival of the Royal New Zealand Air Force No. 62 Squadron, to be dedicated to “space domain awareness”. Though modest in size (reports indicate just 15 people), it marked New Zealand’s first uniformed step into space operations, where symbolism matters and the issue of scale can be addressed later.
Wellington's move to join its Five Eyes partners (UK, Canada, and Australia) in participating in the US-led Operation Olympic Defender, which seeks to deter hostile actions in orbit, underscores its intention to align with longstanding allies. Discussions earlier this month between Prime Ministers Albanese and Luxon in Queenstown, in no small part driven by concerns over recent Chinese naval exercises near their shores, suggest that cooperation within the space domain is merely part of a wider extension of regional security integration.
Domestically, the New Zealand government is also working to tighten space-related controls. A 2024 NZ Security Intelligence Service report warned that foreign actors were obscuring ties to foreign militaries in order to approach local organisations seeking to develop ground-based space infrastructure (GBSI). In response, the Outer Space and High-Altitude Activities Amendment Act, introduced in July this year, requires ministerial authorisation for any ground-based space systems. Its speedy introduction marks a step change in state oversight of a sector that until recently had been dominated by commercial enterprise.
Overall, this should be seen as a blueprint for how a relatively small state can effectively embed itself within allied networks while simultaneously insulating its domestic sector from sustained foreign interference. Nevertheless, these policy choices are not without risk. With the Trump-led United States increasingly looking like an unstable partner and New Zealand more dependent on China for trade than on the United States, questions remain about how long it can balance economic pragmatism with strategic alignment. Ultimately, the 15-person space squadron may matter less than the broader signal: Wellington is staking much of its future on being a trusted custodian of space norms within a Western security framework.
New Zealand’s actions can provide a roadmap for how smaller powers — in particular, those Pacific nations with a similar strategic location — can navigate their own path amid heightened geopolitical tensions. Ultimately, small states run the risk of entrenching themselves in fault lines that are difficult to control. What is increasingly clear is that, in space, just as on Earth, neutrality is becoming harder to maintain.
ACROSS THE INDO-PACIFIC
South Asia
The Trump administration has been recalibrating its calculus in South Asia. It has imposed steep 50 per cent tariffs on India for its continued purchase of Russian crude, while simultaneously concluding a new agreement with Pakistan to expand bilateral trade and jointly explore offshore oil reserves. Pakistan’s PM Shehbaz Sharif, on the eve of its 78th Independence Day, also announced the establishment of the new Army Rocket Force Command (ARFC) to enhance its warfare capacity by centralising its conventional missiles. Nuclear weapons will remain under the Strategic Plans Division (SPD).
In India, the opposition has been challenging the Modi government and the Election Commission over alleged voter fraud. Rahul Gandhi raised concerns in a press conference over discrepancies in voter rolls. The controversy arises amid growing concern over the exclusion of people from the Special Intensive Revision (SIR) of the voter rolls in Bihar.
Against the backdrop of US tariffs, India’s National Security Advisor visited Russia and met President Putin. Meanwhile, New Delhi and Beijing have also made progress towards normalising bilateral relations, with the heads of state expected to meet soon. Improving Sino-Indian relations has raised an issue, however. Nepal has objected to the India-China agreement to reopen trade via the Lipulekh Pass, citing security concerns. India, however, has dismissed these objections.
In Sri Lanka, President Aruna Dissanayake’s electoral promise of fighting political corruption took centre stage. Ranil Wickremesinghe, the former President, was arrested on charges of misusing public funds. Wickremesinghe, who has held the position of Prime Minister six times, assumed the Presidency after the popular protests drove away the Rajapaksa family. The opposition has called his arrest a “political witch hunt”. The Inspector General of Police was dismissed by Parliament on 5 August for gross abuse of power, marking the first such impeachment in the country’s history.
Southeast Asia
At the 58th ASEAN Foreign Ministers’ Meeting, China positioned itself as a mediator between Thailand and Cambodia following their recent border clashes. Chinese Foreign Minister Wang Yi urged reconciliation, encouraging dialogue, mutual trust, and the reopening of border crossings. Beijing offered assistance with landmine clearance, political support, and economic cooperation, including the China-Thailand railway project. While Thailand welcomed China’s role, Cambodia withheld comment. The talks highlighted China’s push to stabilise regional disputes and reinforce its influence in Southeast Asia.
In his first State of the Nation address marking Indonesia’s 80th independence anniversary, President Prabowo Subianto vowed an uncompromising fight against corruption and food cartels. He revealed saving USD 18.5 billion from graft-related leaks and condemned “serakahnomics” — greed-driven cartels costing billions annually. Subianto pledged to enforce laws against powerful interests, reclaim illegal palm oil plantations, and curb unfair rice trade. Calling corruption a massive national leakage, he appealed for parliamentary backing to uphold clean governance and defend ordinary Indonesians.
A Philippine coast guard video showed a rare collision between two Chinese vessels — a navy warship and a coast guard ship — while chasing a Philippine patrol boat near Scarborough Shoal. The Filipino boat was delivering fuel and supplies to fishers when the Chinese ships, in high-speed pursuit, collided. Manila condemned China’s “risky manoeuvres” and urged adherence to maritime safety rules, while Beijing blamed the Philippine intrusion. The incident underscores escalating tensions, highlighting the risks of miscalculation as Chinese pressure tactics grow more aggressive.
East Asia
In China, President Xi Jinping is projecting both hard and soft power on the global stage. On 31 August and 1 September, Xi will host the Shanghai Cooperation Organisation (SCO) summit, welcoming Vladimir Putin and Narendra Modi in a display of Global South solidarity and multipolar leadership. Days later, Beijing will stage its largest-ever military parade to mark the 80th anniversary of the end of World War II — designed not only to showcase China’s modern military might, but also to reinforce its strategic framing that the Chinese Communist Party, and by extension the People’s Republic of China (PRC), is not merely a successor to wartime China but a founding architect of the post-war international system, while embedding the idea of the PRC as an indispensable shaper of global order.
In Taiwan, the ruling Democratic Progressive Party (DPP) suffered another setback, as all seven Kuomintang (KMT) lawmakers facing recall on 23 August survived. Although the recall movement emerged from the grassroots, the DPP’s decision to lend support has proved a strategic miscalculation, leaving President Lai Ching-te and his party slumping in the polls while the KMT emerges reinvigorated. In response, Lai announced a massive Cabinet reshuffle and pledged to refocus his administration on bread-and-butter issues such as the economy. Defence policy looms as a particular test. Concerns remain whether the KMT would support much-needed defence spending increases. American Institute in Taiwan (AIT) Director Raymond Greene met this week with senior KMT lawmakers, and they discussed Taiwan-US cooperation in defence resilience, including drones and civil defence.
In South Korea, President Lee Jae-myung made a symbolic stop in Tokyo before heading to Washington — his first overseas destination since taking office — where he met Prime Minister Shigeru Ishiba, stressed the importance of bilateral cooperation, and called for renewed “shuttle diplomacy”. In Washington, he met Donald Trump and pledged USD 350 billion in investments — including USD 150 billion for shipyards — to help revive the US shipbuilding sector, saying the project would “Make America Shipbuilding Great Again”. Lee’s moves align with his “pragmatic foreign policy” vision: deepening the alliance with Washington to bolster deterrence, maintaining cordial ties with China and North Korea, and working more closely with Japan to hedge against uncertainty in US policy. Lee spoke on these themes during an address on ROK-US foreign policy at CSIS this week.
In Japan, Prime Minister Shigeru Ishiba affirmed during his summit with President Lee Jae-myung that “it is more important than ever for the two countries to cooperate”. Confronted by China’s growing assertiveness and uncertainty in US policy, both governments see closer bilateral cooperation as a way to build a future-oriented partnership while hedging against regional volatility. Japan also secured a landmark ASD 10 billion (USD 6.5 billion) contract with Australia to build next-generation Mogami-class frigates — its most significant defence export since lifting its postwar arms ban. The deal reflects the broadening of Tokyo’s security ties beyond the US and its growing role as a stable security partner amid mounting geopolitical uncertainty.
Pacific Islands
The Cook Islands emphasised that recent agreements with China are focused on economic-development and not related to military or security, even as New Zealand withholds approximately NZ$18 million in core aid, citing inadequate consultation. Rarotonga hosted the 47th Pacific Maritime Transport Alliance conference, highlighting inter-island shipping, maritime infrastructure, and regional connectivity, signalling a desire to leverage external partnerships while retaining sovereign control over development priorities. Meanwhile, Cook Island regulators are considering extensions to deep-sea-mining exploration licenses, with authorities stressing that any commercial extraction would require rigorous approvals and environmental safeguards.
Fiji continues to diversify external partnerships, framing Chinese assistance as provided without political conditions while deepening defence and maritime cooperation with India. Leaders of both countries agreed to enhance joint training, equipment support, cyber-security collaboration, and maritime patrol capabilities. An Indian Defence Attaché has been assigned to cover Fiji and the wider Pacific, while Fiji explores procurement of surveillance drones, radar systems, naval vessels, and expanded participation in joint exercises. This dual engagement reflects Suva’s strategy of hedging between Chinese economic support and Indian security assistance.
Vanuatu has agreed to an ASD 500 million “Nakamal Agreement” with Australia, replacing the 2022 security pact. The arrangement includes funding for two data centres, security aid, budget support, climate resilience projects, and potential visa-free travel for Vanuatu citizens. Australia is also pressing for ratification of a Nauru security treaty and expanding defence engagement with Papua New Guinea, reflecting a coordinated strategy to formalise security arrangements across Micronesia and Melanesia amid growing Chinese investment.
The Marshall Islands’ parliament was recently destroyed in an overnight fire, prompting the government to fast-track a new legislative building and continuity arrangements while investigations proceed. The Solomon Islands have excluded Taipei, Beijing, Washington, and other partners from next month’s Pacific Islands Forum leaders’ meeting, deepening regional divisions over influence and Forum access. Tonga has centralised diplomatic control through legislation granting the King authority over foreign affairs, and Tuvalu’s parliament speaker recently visited Taiwan, maintaining engagement despite Forum restrictions.
In New Caledonia, France’s attempt to create a new state collapsed, while the French PM faces a confidence challenge complicating local negotiations. In preparation for the general election on 29 August, Samoa will deploy approximately 1,300 election officials and 500 police officers to oversee approximately 100,000 registered voters amid unpredictable campaigning.
US and US-aligned regional security measures have intensified in response to Chinese military developments, including a possible Chinese unveiling of an extended-range “Guam killer” ballistic missile. Guam’s layered missile defence is being reinforced with radar upgrades, Patriot and THAAD systems, and Aegis integration. The US is considering new prepositioning sites in Palau and Australia to mitigate theatre-range precision-strike threats.
New Zealand and Australia are seeking closer military cooperation, reviewing intelligence sharing, joint exercises, and force-posture alignment. New Zealand’s Security Intelligence Service has described China as the ‘most active’ threat in foreign interference, employing coercion, corruption, espionage, cyber exploitation, and United Front operations targeting the diaspora, while Wellington is planning NZ$2.7 billion in defence investment. Wellington also faces scrutiny over its trade reliance on the US, with Boeing contracts contributing significantly to GDP. New Zealand sentenced a soldier to two years in military prison for attempted espionage, highlighting persistent concerns over security and espionage in the region.
Finally, Australia is under domestic pressure to provide explicit commitments to the US regarding AUKUS submarines and strategic support, highlighting the intersection of regional security obligations and alliance politics. Canberra has developed expanded powers to deport non-citizens to third countries.
THE BEST OF 9DASHLINE
JAPAN AND CAMBODIA’S STRATEGIC PARTNERSHIP
Amid growing US-China rivalry, Cambodia has pursued a balanced foreign policy, deepening ties with Japan to offset concerns over Chinese influence, particularly at the China-funded Ream Naval Base.
Shin Kawashima highlights how Prime Minister Hun Manet uses diversified partnerships to avoid over dependence, with Japan’s “Free and Open Indo-Pacific” vision offering a credible framework for cooperation on security, development, and regional stability.
He argues that Japan must position itself as a consistent, inclusive partner — supporting Cambodia’s autonomy while advancing FOIP goals — otherwise Phnom Penh risks drifting further into China’s orbit.
RATIFYING THE INDONESIA–VIETNAM EEZ MARITIME DELIMITATION AGREEMENT SERVES NATIONAL AND REGIONAL BEST INTERESTS
In December 2022, Indonesia and Vietnam reached a landmark agreement on their overlapping Exclusive Economic Zones after 12 years of negotiation. More than a year later, Indonesia’s parliament has yet to ratify it, and official boundary maps remain unpublished, though both countries’ coast guards appear to respect the deal informally.
Aristyo Rizka Darmawan (Universitas Indonesia) and John Bradford (RSIS, Nanyang Technological University) note that ratification would reinforce Indonesia’s rejection of China’s Nine-Dash Line, boost Jakarta’s credibility, and provide ASEAN a model for resolving maritime disputes peacefully. Delays risk undermining Indonesia’s regional leverage and confidence in its South China Sea policy.
THE FIGHT FOR THE FUTURE OF GLOBAL DIGITAL PAYMENTS
As digital payments surge — projected to exceed USD 33 trillion by 2030 — China and India are competing to shape the future of global finance. India’s Unified Payments Interface (UPI) prioritises sovereignty and interoperability, while China’s platforms, like Alipay, focus on cross-border integration, raising concerns about transparency and economic influence.
Andrew Gordan (Senior Fellow, Center for Financial Diplomacy) highlights how these models reflect broader geopolitical ambitions: India’s approach supports a multipolar, autonomous system, while China seeks economic dominance. This competition extends to regions like Oceania and Sub-Saharan Africa, making careful navigation essential for a secure and fair global digital payments ecosystem.
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