3 Geopolitical Trends to Look Out For

This blog delves into three significant geopolitical trends shaping the current world order: China’s assertive actions in the South China Sea, the political dynamics following India’s 2024 General Election, and New Zealand’s potential involvement in the AUKUS security partnership. These trends not only impact regional stability but also influence global economic and security environments, reflecting the complex merger of national interests and international alliances.

East Asia

China’s pursuit of its expansive sovereignty claims in the South China Sea (SCS) has been an ongoing issue in Asian geopolitics since they were made in May 2009. Since then, the scale of China’s land reclamation, militarization and naval modernization has dwarfed that of rival claimants like the Philippines, Malaysia, and Vietnam. While there are competing claims throughout the SCS that are all potential flashpoints, Chinese claims within the Philippines’ Exclusive Economic Zone (EEZ) have been increasingly prominent over the last 12 months. The Second Thomas Shoal, known by the Philippines as Ayugin and China as Ren’ai Jiao, which lies around 120 miles Northwest off the coast of Palawan and 20 miles from the Chinese-occupied Mischief Reef, is the most concerning. A small Philippines garrison has maintained a presence at the shoal aboard the rapidly disintegrating BRP Sierra Madre, an old LST grounded in 1999. The China Coast Guard (CCG) and Maritime Militia (CMM) have increasingly interfered with efforts to resupply the garrison, with boats being rammed and the CCG increasingly hitting smaller Philippines Coast Guard (PCG) boats with water cannons. The Philippines has sought to counter China’s actions by publicizing them and seeking the greater involvement of allies – with Australia and Japan becoming more involved in regional maritime security alongside the US. Even so, it is clear that the Philippines is badly outmatched, and China now appears to be bringing the Second Thomas Shoal issue to a head by effectively blockading the garrison and preventing any Philippines efforts to shore up their position through more permanent construction. The boarding of Philippines Navy (PN) ships attempting to reach the shoal by CCG on June 17, which left a PN sailor badly wounded, was a significant escalation against a treaty ally of the US and an indication of how serious a security issue the South China Sea is becoming.

Recent incidents in the South China Sea [image source: Intelligence Fusion]

India

Although a victory for the Bharatiya Janata Party (BJP), the 2024 Indian General Election saw the party hold onto power without an absolute majority in the Lok Sabha. This is the first time the BJP has had to enter into a coalition government since forming a majority government in 2014. The consequences of this are primarily domestic. For the first time in a decade, the Modi government will frequently require the support of other parties to pass legislation. Partners in the National Democratic Alliance (NDA), such as the Telugu Desam Party, may use their increased leverage to more aggressively advance local interests in their constituencies. The Indian National Developmental Inclusive Alliance (INDIA) group of parties, although successful in denying the BJP a majority government, is comprised of far more small parties than the NDA, and the Indian National Congress (INC), the largest party in the alliance won only 101 seats. INDIA is, therefore, unlikely to present a unified and effective opposition, and BJP rule is likely to be more affected by coalition partners than the opposition.

The international consequences of this are limited. Large infrastructural, defence or other business deals negotiated in India may come under more scrutiny and revision than they did under the majority BJP government from 2014-24. Foreign companies or governments looking to operate in India will likely have to negotiate a more complicated and dynamic ecosystem of local party interests, which may see coalition partners attempting to steer investment to their own constituencies. Indian foreign policy is likely to remain muscular. Coalition partners, which are generally parties with very local interests, are less likely to scrutinize BJP foreign policy, and so continued assertive behaviour abroad may prove an attractive option to shore up BJP support in the future.

Recent incidents involving the Bharatiya Janata Party (BJP) [image source: Intelligence Fusion]

Oceania – NZ now joining AUKUS

AUKUS is a trilateral security partnership between Australia, the United Kingdom and the United States. It has two tiers or pillars, the first of which is dedicated to helping Australia acquire conventionally armed, nuclear-powered submarines. The second pillar is dedicated to collaboration and development of advanced capabilities in fields such as artificial intelligence, hypersonic missiles and cyber and quantum technologies.

In 1984, New Zealand banned nuclear-powered or armed vessels from its waters, meaning the country is unlikely to join AUKUS on a pillar-one basis. However, the October 2023 general election led to a Liberal victory, with Prime Minister Christopher Luxon’s government seen as more open to foreign policy change and possibly joining AUKUS on a pillar two basis.  New Zealand already collaborates with Australia, the UK and the USA alongside Canada as part of the Five Eyes intelligence alliance.

Joining AUKUS may seem like a logical step for New Zealand given its cultural and security ties with other members, especially in the face of China’s assertiveness in the South China Sea and broader Pacific, but discussions are tentative at this stage. Complicating the issue is the fact that China is New Zealand’s largest trade partner by import and export. Premier Li Qiang has this week visited New Zealand where, on June 13, he signed trade agreements with Prime Minister Luxon, acknowledging, “We don’t always agree with each other on everything”. Luxon specifically highlighted AUKUS as a Chinese concern.

Li Qiang is set to visit Australia as he departs New Zealand, where optimism is high that the last punitive trade restrictions imposed by China in recent years will be removed. Li Qiang’s visits highlight the juxtaposition of improving economic ties across the region as discussions about AUKUS expansion gain traction. Japan, South Korea, and Canada are also considered contenders for the expansion of the security partnership as they attempt to enhance security in the wider Indo-Pacific and counterbalance any potential regional threats.

Recent incidents involving AUKUS [image source: Intelligence Fusion]

The geopolitical landscape is continuously evolving, influenced by the strategic decisions and interactions of key global players. To understand more about these trends or others, get in touch today to speak to a member of the team or to book a demo of our threat intelligence platform.

Authors: Alex Smith; Malavika Radhakrishnan; Adam Brown