The emerging monopoly of China over ASEAN’s defence

As the United States scrambles for a collective response, something is brewing on the other side of town…

A minister of the Philippines expressing his support for information sharing between the Philippines and China. SOURCE: WALL STREET JOURNAL

In the Special Defense Dialogue, it seems that the Department of Defense has made an important concession to foreign powers. While the Secretary of State and the Secretary of Defense have been investigating solutions to the matter of funding anti-terrorist technology, ministers of China and other foreign powers have been aggressively lobbying the others within the Dialogue to support increasingly localised intelligence solutions within the Asia-Pacific region.

With the recent bombings perpetrated by yet unknown actors in Russia, it seems that the Western alliance has been holding their tongues on the matter of terrorism prevention within the Asia-Pacific region. This has given space for China’s Inter-Regional Counter-terrorist Charter (hereafter referred to as IRCC) and Indonesia's Southeast Asia Terror Financing Intelligence Cell to rise in popularity amongst ministers of the region, whereas the western alliance’s own framework, F-ATF, has not yet been materialised.

The end of an era? 

Perhaps this inactivity in the realm of international defense comes without genuine reason. The intelligence industry is still a lucrative one, valued at over 29.2 billion USD in 2024. With intelligence agreements deepening between America and numerous other nations within the Asia-Pacific region, it seems clear to the analyst that this prosperity is a stable prospect for the wise investor, especially in these base industries: information gathering and analytics, as well as natural language processing. In this digital age, American intelligence agencies possess the technological upper hand, ushering in many new growth opportunities for the development of the technological frontier.

It may come as a surprise, then, that the role of relevant industries was not sufficiently emphasised within the conference, especially as multilateral agreements were proposed by delegates of NATO started to gain a foothold in the Dialogue.  

When interviewed, the Secretary of Defence stated that while it was possible for the United States to increase its counter-intelligence programmes against Chinese influence in the region, emphasis was also placed on the stake that the United States had in trade with China and other nations. According to the Secretary, the States within ASEAN had the right to ally with “whoever they wanted”. 

Putting aside the geopolitical implications of this stance, the loss of American presence within the region also heralds the missed opportunities for investment within the tech sector, leaving the market wide open for foreign competition. Indeed, Chinese government investment in the realm of intelligence-related technology has increased greatly, with a 7.2% increase seen in 2025.3 Contractors like IBM and Iodine software hence face stiffer competition, especially as the Department of Defence telegraphs its exit from these industries. 

Additionally, even if the Secretary of Defense’s statements come to pass, increased Chinese intelligence in the area still poses a threat to the freedom of trade in the region, as intelligence operations under the guise of counter-terrorist operations compromises the security of vessels moving through the region. Investor confidence may shift in favour of Chinese enterprises, an additional burden on American exporters. 

China outcompeted the United States in net exports to the Asia-Pacific region as of 2025. SOURCE: VISUAL CAPITALIST 

Perhaps the United Kingdom’s approach to the solution would be of greater value to American interests, as the International Convention Against the Financing of Terrorism presents a more trustworthy international approach to the issue of terrorism. Not only does it disable terrorist operations at the fundamental scale, it also does not run the risk of over-interference with the economic zones of the region.

The economic prospects of the Asia-Pacific region are of key importance to the functioning of industry, both in America and abroad. Maybe the secretaries should consider the opinions of the investor and the concerned exporter, before deciding that they have no stake in the matter.

Written by Klaus Lucas Yeo, Yee Min En, and Bethany Mary Piper