The foundational principles of the balance of power has found its textual footing primarily through the works of Hans Morgenthou and Kenneth Waltz. It was formalised as a core principle of diplomacy and international relations following the Peace of Westphalia (1648) and the Treaty of Utrecht (1713) and is generally considered as an Eurocentric concept. Understandably, the philosophy of ‘balance of power’ forms a major part of the theoretical concepts of international relations, and in understanding the power among nations along with realism.
This article focuses on the idea of balance of power and how it is reshaping the political and economic relations among nations in Asia. It argues that the power is not shifting, but disintegrating. To defend the stance,it draws on examples of various Asian nations.
The 21st century is generally acknowledged as an Asian century- a century that is marked by unprecedented economic rise, political resurgence and Asian preeminence. Notably, the century also witnessed the rise of major Asian powers in the international sphere viz. , China, Japan, India and Russia. The balance of power in Asia is one of a prolonged challenge and interregnum, principally, the period between dissolution of concentration of power and the emergence of another. The paper seeks to argue that the power shift in Asia is not the rise of any single power, but the collision between the dialectics of economic interdependence and security rationale that demands strategic separation.
Globally, Asia is home to the largest concentration of middle powers. In the 16th century, the middle powers were defined by the political thinker Giovanni Botero as states with “sufficient strength and authority to stand on their own.” The most recent example of one of the influential voices of middle powers were heard at the G7 Summit at Evian, where other than the only Asian power- Japan, the prominent one came from India. Further, at the World Economic Forum in Davos Switzerland, Canadian PM Mark Carney urged the middle powers to come together and asserted two of the most powerful statements., like “”Middle powers must act together because if we’re not at the table, we’re on the menu,” and “the world is in the midst of a rupture, not a transition”.
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Political Rupture or Transition?
After a brief period of American unipolarity, the post-world order rested on two fundamental ideas. One, the waning of American influence and second, the emergence of multipolarity. The period saw the emergence of China and its assertive power. Moving China’s grand strategy from abandoning Deng Xiaoping’s “hide and bide” strategic posture explicated China’s international aspirations. On the political and economic fronts- the launch of Belt and Road initiative, the construction of military installations, airstrips, ports particularly in the Paracel and Spratly Islands defying 2016 UNCLOS, its economic policy tools of coercion and penalisation and more so, the Wolf Warrior diplomacy represent a China that fundamentally fractures the Western construct.
India and China share a border of more than 2,100 miles and several overlapped territorial claims. One of the most defining and consequential confrontations between two most powerful Asian nations occurred in 2020 at the Galwan Valley. While this ruptured India’s relations with China, it also ended the strategic restraint and ambiguity of India. The subsequent efforts of India followed- the deepening of QUAD engagement, banning of Chinese applications, focus on digital sovereignty to counter China’s plans of a digital yuan to internationalise renminbi, supply chain diversification initiatives thus brought a realignment of political-economic relations in Asia.
The example of Japan is equally fascinating. From a landmark change in the security policy in 2014 by allowing “collective self-defence” under PM Shinzo Abe to a historic shift under Prime Minister Fumio Kishida to double the defence budget to two percent of GDP define a changing politics in decades.
The Strategy of Hedging
If the great powers define the structure in the international sphere, the most important question is what the middle-powers, especially in the context of Asia, are doing about it. The most important yet under-utilised concept of ‘Hedging’ is relevant here. As the theory goes, most of the non-big actors in the system are hedgers – they don’t take sides but diversify the alignments.
The doctrine of ‘strategic autonomy’ updated from the Nehru era’s Non-Alignment holds that India will safeguard its national interest and will not subordinate its foreign policy to any great powers. The practical expression of this is seen in India’s concurrent involvement with QUAD, Shanghai Cooperation Organisation and BRICS. India abstained on UN resolution condemning Russia’s attack on Ukraine, while also deepening strategic and defense ties with the US. This reflects India;s deliberate strategy and position in a multipolar environment.
An equally illustrative example is that of Vietnam, which has for long kept China at arm length. Today, China is Vietnam’s largest trading partner and is heavily dependent on Chinese electronics, machinery and raw materials. In April 2026, Vietnamese President To Lam’s visit to Beijing also reinforced the bilateral relations between the two nations when Hanoi assured support for China’s four global initiatives and the possibility of becoming an SCO partner. In September 2023, the US-Vietnamese ties reached a landmark moment when the two nations elevated their relations to Comprehensive Strategic Partnership. Simultaneously, Vietnam’s strategic partnerships with Australia, India, Japan, and South Korea under the late Communist Party of Vietnam general secretary Nguyen Phu Trong, staying true to the ‘bamboo diplomacy’ doctrine presents the new diplomatic era of the nation.
As the largest economy and most populous nation in Southeast Asia, Indonesia under President Prabowo Subianto is navigating a structural constraint. China is Indonesia’ s largest trading partner, and its official membership in BRICS in 2025, followed by Prabowo’s meeting with President XI Jinping in September 2025 reveal a growing partnership between both countries. Parallelly, its significant defence ties with US anchored by Super Garuda Shield exercises, its recent landmark defense cooperation agreement with Japan in May 2026 all reflect a strategic level of hedging, by not entering into any formal alliance with the great powers.
The Economic Realignment
The changes in Asia power relations were also reflected in a relative economic rewiring along with the political realignment as discussed above. This restructuring is reshaping the financial architecture, the trade flows and also the investment patterns across Asia.
The most consequential economic development has been the partial decoupling of the supply chains- what the policymakers call ‘friend-shoring’ or de-risking’. The Covid-19 pandemic exposed the vulnerability of globally integrated supply chains in China and the weaponisation of economic interdependence- some of the examples of which include- sanctions against Australia post Canberra’s calls for an independent investigation into the origins of Covid-19, the economic coercion over South Korea following the deployment of U.S. Terminal High Altitude Area Defense (THAAD) system in 2016.
Hence, the response from other nations has albeit not a complete shift, yet restructuring. Some of the most consequential of thes include Japan’s $2.3 trillion semiconductor programme, U.S. CHIPS and Science Act, India’s PLI scheme for electronics and focus on semicon and supply chains all reflect the idea of diversification of supply chain and concentration on semicon, viz.a viz a technological arms race that reveals a security-economic and future AI competition.
In terms of infrastructure, China’s much ambitious BRI initiative is met with emerging alternatives like IMEC, Blue Dot Network etc. The BRI represents one of the major and problematic projects that would establish Chinese influence across the connectivity architecture and the political risks associated with it, for instance, as that of Sri Lanka’s Hambantota Port, which became a symbol of what critics call debt-trap diplomacy. Equally contested is the financial architecture -the BRI’s complement is China’s Cross-Border Interbank Payment System, designed to facilitate trade in renminbi outside the dollar-based SWIFT system. India’s UPI, which now accounts for nearly half of all global real-time digital payment transactions and is operational across multiple countries represents both a domestic transformation and an emerging instrument of financial diplomacy. The ongoing discussions on the need for alternate payment systems reflect a shift in how Asian nations think about financial diplomacy and the prospects of de-dollarisation.
Conclusion
In 1930, sitting in a prison Antonio Gramsci wrote: “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.” This precisely captures the political and economic relations among nations in Asia. The post- Cold War period built on American supremacy and the subsequent just US-China rivalry is slowly dying and paving the way for the disintegration of power among other nations. Although structurally dominant in the international structure – of the US-China tension, the region is also witnessing the rise of countries like India, Japan and more in infrastructural and economic realms. It is a system in transition – economically realigned along financial infrastructure, technology etc, and politically fractured on strategic separation and national interests.
