Asia’s role in a world unhinged: From disruption to direction

The Griffith Asia Pacific Strategic Outlook (GAPSO) 2026 arrives at a historic inflection point: a world increasingly “unhinged” from the rules and alliances that governed the last eight decades. This is not a temporary shock, but a permanent reconfiguration driven by four accelerating transitions: the assertive “Donroe Doctrine” reshaping global security alliances and trade, the rapid deployment of generative AI, a green energy transition that makes energy affordable and undermines fossil fuel interests, and the steady emergence of a new financial order as an alternative to the US dollar dominance. For Asia-Pacific decision-makers, adhering to old playbooks now risks sovereign and competitive vulnerabilities. Navigating this era of disequilibrium requires a shift from reactive management to “adaptive leadership”—anchoring action in regional values to secure a peaceful and prosperous future.

Understandably, many decision-makers and communities continue to hope that these developments will not be permanent and cling to an old order of economy or the world. They point to the still formally operating institutions, such as the UN or the resilience in international trade despite the tariffs. Yet, to use an analogy—our institutions are like a train wagon that, after becoming unhinged from its locomotive, will continue its path for a while before it stops or takes a potentially catastrophic tumble. The world’s formal institutions, such as the United Nations or our security architecture, will continue to operate despite their active deconstruction and defunding, but they have already become increasingly directionless and powerless … and are at risk of tumbling.

With an increasing trust gap in international institutions, many businesses and countries are simultaneously accelerating their efforts to develop “strategic autonomy” across energy, food, minerals, finance and defence. As Canadian Prime Minister Mark Carney pointed out at the World Economic Forum (WEF) in January 2026, this is understandable: “When the rules no longer protect you, you must protect yourself.” However, as he continues, in this scenario, small and middle powers will lose out rapidly while the hegemons lose eventually, too.

Asia Pacific as a locomotive for global sustainable development

While it would be premature to assert that global leadership has transitioned from North America or more broadly the West to Asia, it is evident that Asia has emerged as a central locomotive to the global system. The region has become the primary centre of economic activity, driven by its position in global value chains, its expanding technological ecosystems, and its vast consumption markets. Within the global framework, Asia now functions less as a periphery force and more as a pulling locomotive whose force is reshaping patterns of power, interdependence, and the future direction of the global system.

To support Asia Pacific leadership in making sense of the significant developments and to provide approaches to tackle the rapidly evolving issues, we have again brought together some of the smartest minds from the region to compile the Griffith Asia Pacific Strategic Outlook (GAPSO) 2026 with six policy briefs for different aspects – from China to Southeast Asia, from green transition to misinformation.

In sum, for Asia-Pacific decision-makers in policy, business and society, the world’s developments provide significant risks and opportunities – and important decisions need to be taken that will challenge previously unshakable foundations. There will be winners and losers in industry, politics and communities. However, there has never been a greater opportunity to accelerate Asia-Pacific’s role in sustainable development leadership – if decision-makers make the right choices.

The following three-pillar framework, adapted from adaptive leadership principles,[i] emphasises the need to observe systems objectively, anchor action in values, and cultivate a collective capacity to navigate uncertainty. In this spirit, the framework can serve as an essential guide for shaping a future that is peaceful, sustainable and prosperous.

Realism: Understand that disruption is really happening – and avoid hopeful thinking.
Compass: Lead by defining and following core values and interests amid turbulence.
Adaptive and collaborative resilience: Remain flexible, understanding that progress is not linear, and the ‘best’ path is not known. Rather, be prepared to adapt and collaborate with various stakeholders.

Figure 1: Adaptive leadership for radical transitions

Source: Authors.

1. Realism – A world unhinged

The world in 2025 has changed course from previous years. APAC leaders must shift their mindset from hoping for a “return to normal” to managing continuing disequilibrium. This means to stop treating events linked to the “Donroe Doctrine” or the hollowing of the global trade or the rapid advent of AI as reversable shock. These trends represent a permanent unhinging of long-standing norms and require new pathways to deal successfully with them.

We found it helpful putting the risks into a radar screen—and find that many key developments have a high global impact and high likelihood—making indecision a punitive strategy but requiring urgent adaptive leadership.

Figure 2: Risk radar of global developments requiring adaptive leadership

Geopolitics: deterrence or new alliances

The Donroe Doctrine, formalised in late 2025, represents a total reorientation of US power toward hemispheric hegemony. This shift—signified by the aggressive renaming of the Department of Defense to the Department of War—marks a rapid escalation from economic coercion to the overt use of hard power³. By treating the region from the Arctic to Antarctica as an exclusive “fortress,” the administration has abandoned traditional diplomacy for a “Trump Corollary” defined by transactional alliances and military force. For Asia-Pacific leaders, the challenge is clear: the weakest link is no longer American capability, but American reliability.[ii]

For traditional allies, this shift has created a climate of volatility and perceived threat. The administration has undermined the European Union by framing it as a “competitor in decline” and pressuring member states to align with US economic, cultural and security imperatives. This reached a breaking point with the Greenland crisis, where threats of annexation and military “Arctic endurance” operations nearly fractured NATO in January 2026, leading Denmark and other EU nations to deploy defensive forces against their own ally. Similarly, Canada faces unprecedented pressure as the doctrine challenges its sovereignty; the US administration has imposed punitive 25 per cent tariffs and rhetorical threats of annexation to demand total alignment on trade and border security. This “Donroe” era marks a departure from a rules-based world order in favour of a raw, power-based system where proximity to the United States dictates a nation’s degree of autonomy.

China’s reaction, as the regional military superpower (with about a third of military spending of the US in both absolute terms and in terms of percentage of GDP[iii]), is of utmost importance. Facing pressure to counter the perception that it cannot protect its partners against “fierce storms”—a concern raised by The Economist[iv] following the US attack on Venezuela—Beijing may consider[v] requests for sophisticated weaponry from nations seeking to defend against US aggression, risking rapid proliferation.

This shift has direct implications for Taiwan, which China sees as an integral part of China. Beijing has steadily expanded coercive capabilities through military exercises and incursions, which Chinese officials describe as calibrated measures aimed at preserving peace and stability across the Taiwan Strait. Given the 80th anniversary of the PRC in 2029 (and the upcoming 2027 milestone seeing a fourth presidential term for Xi Jinping), reunification remains a central goal. Other nations, including the Philippines, Korea, Japan, and Australia, must also evaluate the stability of US security guarantees, learning from examples in Europe and Canada, requiring painful decisions for a re-evaluation of long-standing security arrangements.

Beyond military aggressions, the US has over the past year systematically moved to dismantle the post-war multilateral order, framing international institutions as “wasteful, ineffective, or harmful” to American sovereignty. In January 2026, the US administration announced its withdrawal from 66 international organisations and treaties, including 31 UN entities. Key targets included the World Health Organization (WHO), the UN Human Rights Council, and UNESCO. These exits are fuelled by a “back-to-basics” ideology that rejects what the US administration calls “globalist agendas” and “woke orthodoxy.”

By defunding or abandoning these bodies, the US purposefully erodes international law, legitimising a world where power determines outcomes and leaving middle powers across Asia vulnerable to a fading rules-based order.

Technology transition: AI as a source of opportunity and instability

The second accelerating transition is artificial intelligence. In early 2026, the Asia-Pacific region (like the rest of the world) is navigating a transition where the speed of AI deployment has outpaced traditional regulatory cycles.

Advanced economies like Singapore and South Korea are developing frameworks toward proactive risk mitigation. Meanwhile, particularly emerging Asia-Pacific markets face a “sovereignty dilemma” forcing them to choose between rapid adoption of foreign-made AI models to stay competitive with little regulatory oversight or a loss of competitiveness. This tension is projected to drive a $1.1 trillion surge in APAC IT spending for 2026. Yet as the IMF warns,[vi] only countries with a high “AI-complementarity” rate in the workforce will benefit from AI, while less developed APAC countries (e.g., Laos) will lose out.

In response to the 600 per cent rise in synthetic misinformation expected for 2026 (compared to 2024), India and Indonesia are accelerating their transition from voluntary guidelines to strict legal enforcement in 2025–2026. For example, India’s October 2025 IT Rule amendments mandate that 10 per cent of any AI-generated content’s surface area must be covered by a visible label. Similarly, Indonesia will move to formalise its 2023 Ethics Circular into a Presidential Regulation in early 2026, specifically targeting “Disinformation-as-a-Service.”

The anticipated signing of the ASEAN Digital Economy Framework Agreement (DEFA) later in 2026 will be the first attempt to harmonise cross-border data flows with AI governance across ten diverse economies. To mitigate the risk of “agentic failure” and social polarisation, policymakers are now prioritising a “digital chain of custody”—using blockchain and metadata watermarking to verify information origin. The success of this transition hinges on whether the region can move to build a unified, high-trust digital ecosystem that balances breakneck innovation with the protection of democratic integrity.

Energy transition: green cost leadership versus incumbent protection

The third central transition is the green transition. In 2026, the Asia-Pacific energy transition has reached a “pivotal decoupling” where renewable energy capacity additions have begun to outpace total electricity demand growth in several major economies. China remains the single most important pillar of the global green transition. In 2025 alone, it installed more than 300 gigawatts of solar and 100 gigawatts of wind capacity (in comparison: Australia’s total power generation capacity is 108 GW), with renewables in China now accounting for nearly 60 per cent of total installed power capacity. China is projected to reach its carbon peak in 2025 or early 2026—years ahead of its original 2030 target—with non-fossil sources now supplying nearly 40 per cent of its total generation and decreasing use of coal. India is similarly accelerating, set to overtake the United States as the world’s second-largest solar market in 2026 by adding over 50 GW of capacity in a single year and for the first time, reduced use of coal[vii] (and similarly, of oil due to the growing role of electric vehicles).[viii] However, this progress faces a “gridlock risk” as aging infrastructure struggles to integrate variable renewables. To address this, the ASEAN Power Grid (APG) reached a milestone in January 2026 with the signing of the Energy Wheeling Agreement Phase 2,[ix] enabling more seamless multilateral renewable power trade between Laos, Thailand, Malaysia, and Singapore.

Despite these gains, the region faces a “critical mineral bottleneck” and rising energy security concerns. While coal’s dominance is weakening, the IEA notes it remains a primary baseload source for India and Indonesia through 2026 to support industrial expansion and the massive power demands of new AI data centres.[x] Furthermore, the transition is increasingly tied to “resource nationalism,” as countries like Indonesia and Vietnam tighten domestic processing requirements for nickel and rare earths to secure their spots in the global EV supply chain. As of early 2026, the success of the transition depends on mobilising the estimated $764 billion required for regional transmission upgrades, a goal now supported by the newly launched ASEAN Power Grid Financing Initiative led by the ADB and World Bank.[xi]

Furthermore, fossil-fuel dependent countries—particularly fossil fuel exporting countries of Asia—face political backsliding. Businesses in incumbent fossil industries have successfully mobilised policymakers to expand support – including through accelerated licensing and subsidies—partly hiding behind arguments like employment and just transition considerations. Such resource nationalism and business interests in major exporting countries (including Indonesia and Australia), particularly in coal and gas, delay adjustment and lock in future liabilities. External pressures, including efforts by the United States to expand LNG exports to Asia,[xii] further complicate policy choices by framing energy decisions through a security lens.

The outcome of this transition will depend on whether policymakers allow price signals to drive energy systems or continue to shield legacy sectors, including through efforts during COP31, chaired by Australia and Türkiye.

Trade as a stabilising anchor

In 2026, the Asian trade landscape is defined by “pragmatic regionalism,” as economies attempt to insulate themselves from slowing global goods trade, which the WTO projects will grow by only 0.5 per cent this year.[xiii] To counter this, ASEAN and its partners are shifting focus from traditional commodity trade to high-value digital and services integration. The milestone event of 2026 is the expected signing of the ASEAN Digital Economy Framework Agreement (DEFA), the world’s first region-wide digital-only pact. By harmonising rules for cross-border e-commerce and digital payments, DEFA is projected to double the region’s digital economy to $2 trillion by 2030, offering a critical growth engine for the 97 per cent of regional businesses that are SMEs.[xiv]

Simultaneously, the “China Plus One” strategy has matured into a permanent structural shift rather than a temporary hedge. In 2026, supply chain diversification is driving record FDI into Vietnam, Malaysia, and India, particularly in semiconductors and electric vehicles. While China’s direct exports to the US have fallen significantly, its trade with ASEAN and the Global South has surged, with total exports growing by 5.4 per cent in late 2025 through transhipment and new market entry. This reconfiguration is supported by the continued expansion of the CPTPP, which, under Vietnam’s 2026 chairmanship, is expected to launch formal accession talks with Indonesia and the Philippines, further solidifying Asia’s role as the primary laboratory for modern, high-standard trade rules.

A new financial order is emerging

In 2026, the Asia-Pacific financial landscape will accelerate its digital transition and potentially the transition away from US dollar dominance. A cornerstone of this shift is the AEC Strategic Plan 2026–2030, which prioritises the ASEAN Local Currency Transaction (LCT) Framework.[xv] This initiative has facilitated a “quiet revolution” in cross-border payments, with real-time linkages like Project mBridge—a multi-central bank digital currency platform—now processing tens of billions in transactions. By bypassing traditional correspondent banking, these systems offer near-instant settlement and reduce the region’s historical over-reliance on the US dollar, particularly for intra-regional trade.

The Renminbi (RMB) will reach a critical inflection point in 2026, transitioning from a settlement currency to a major global financing currency. Bolstered by China’s lower interest rate environment and the 15th Five-Year Plan (2026–2030), the RMB has solidified its position as the world’s second-largest trade finance currency. Regional businesses increasingly prefer RMB-denominated financing to hedge against dollar volatility, supported by the expansion of the Cross-Border Interbank Payment System (CIPS) to over 1,700 participants. While capital account restrictions mean the RMB remains a “specialised” rather than universal reserve currency, its role as a regional financial “highway” is becoming a structural reality in Asian trade.

2. Define the compass of values to provide direction

Against the backdrop of this long-term reconfiguration of the international order, employees in business, people in our communities, as well as leaders in international relations will feel a sense of loss and fear. This will lead many to a search for authority, a leader or a lead nation, that creates stability by either protecting the old rules (which is unlikely) or creating a new set of rules. At the same time, we will see a drive to accept and normalise behaviours (such as the Donroe doctrine or trade barriers) against values we held dear for decades, while hoping it does not get worse by appeasing the rule breakers.

Yet, ultimately, the current transitions will be a messy, non-linear process that demands sophisticated leadership skills over traditional management.

For leaders to provide the direction for change in our transition, they need to be driven by a compass based on value hierarchies defined by their constituents. These values—such as peaceful co-existence, planetary boundaries, or shared prosperity—form the building blocks for engagement in technology, geopolitics, and trade.

Since values often conflict (e.g., job protection vs. AI acceleration), they must be worked out through deliberative processes rather than top-down mandates. Regional and still functioning frameworks like ASEAN, RCEP or the Belt and Road Initiative provide space for these contentious discussions. Leaders have two specific responsibilities here:

Avoid oversimplification and quick fixes: Resist the pull of nationalism or racism as “simple” value sets, as they undermine the cooperation needed for global transitions.
Reject normalisation of wrongdoing: Do not rationalise unacceptable behaviours—such as corruption, abuse of power, or using force for economic gain—by framing them as part of a larger strategic picture. The compass must reflect the world we want to live in, not just the world as it currently is.

In essence, while it is important to accept the world as it is rather than the world we once lived in, it should be the compass of the world we want to live in that guides us.

3. Adaptive resilience

While the transition path is non-linear, it cannot be a vacuum of accountability. Leaders must define where the “new normal” ends and where exploitation begins, moving beyond setting a direction to actively policing the boundaries of acceptable conduct.

Set clear ethical perimeters: Leaders must define what constitutes a transgression in a shifting landscape. This includes setting hard boundaries against the use of synthetic misinformation or deepfakes to manipulate markets or elections.
Mandate transition compliance: Policy makers should set non-negotiable borders for industry incumbents, such as definitive timelines for fossil fuel phase-outs or mandatory AI transparency. Leaders must have the will to sanction those who trespass these borders, even if it reduces short-term rent-seeking opportunities.
Uphold fairness and transparency: Enforcement ensures the transition is not hijacked by elite interests. This involves defending a level trade playing field and ensuring that “innovation” does not become a loophole for labour exploitation.
Institutionalise consequences: In the APAC context, leading institutions must demonstrate the power to penalise non-compliance. Without active enforcement, the value compass remains purely aspirational and fails to provide the safety constituents need to embrace change.

Introduction to GAPSO policy briefs

As 2025 may ultimately be remembered not as a moment of collapse, but as a hinge year—a point at which the future decisively stopped resembling an extension of the recent past, we see 2026 as the year of critical inflections for Asia Pacific on key topics.

It is within this broader context that the third edition of the Griffith Asia–Pacific Strategic Outlook (GAPSO 2026) has been developed. As in previous editions, the volume brings together scholars from the Griffith Asia Institute alongside leading collaborators from across Asia to examine the major political, economic, and strategic developments shaping the Asia–Pacific in 2025. The contributors not only assess the key issues and dynamics of the past year but also identify emerging trends and risks likely to influence the region’s trajectory in 2026. What follows is a synopsis of the chapters included in this edition.

Regional highlights:

“China – Staying the course” authored by Christoph Nedopil (Griffith Asia Institute), Jean Dong (Harvard Kennedy School) and Hui Feng (Griffith Asia Institute). This chapter argues that China has maintained a largely stable and predictable strategic course in 2025 despite heightened Western pressure and geopolitical fragmentation. It highlights China’s expanding regional influence, technological leadership, and central role in the global green transition, alongside continued trade resilience and gradual renminbi internationalisation. At the same time, the chapter underscores persistent domestic constraints, deflation, excess capacity, weak consumption, demographic change and a prolonged property downturn. It concludes that China is consolidating its position as a regional economic and technological anchor, creating both opportunities for cooperation and heightened risks that call for nuanced, non‑binary engagement by regional partners.

“Emerging political, economic, social transformations in Southeast Asia” authored by Sovinda Po (Center for Southeast Asian Studies) and Andrea Haefner (Griffith Asia Institute). The chapter analyses five interrelated political, economic, and social transformations reshaping Southeast Asia: the region’s pragmatic response to rising US tariffs through bilateral and regional diversification; the escalation of the Thailand–Cambodia border dispute as a case of politicised nationalism and weak conflict‑management mechanisms; political reconfiguration in Vietnam and Laos driven by leadership transitions and state consolidation; Vietnam’s expansion of artificial islands in the South China Sea as a defensive yet destabilising assertion of sovereignty; and the shrinking space for civil society in the Mekong region amid aid cuts and regulatory tightening. Together, these trends illustrate a region navigating growing external pressures and internal restructuring, where economic resilience, geopolitical competition, governance reform, and civil society constraints are increasingly intertwined and demand more integrated, forward-looking policy responses.

“On being the grass … strategic outlook for the Pacific island region” authored by Tess Newton Cain (Griffith Asia Institute). This chapter examines the strategic outlook for the Pacific Islands region at a moment of global inflection, arguing that intensifying geopolitical competition and the decline of multilateralism are placing unprecedented pressure on Pacific sovereignty, agency, and strategic autonomy. Using the metaphor of the Pacific as “the grass” amid competing “elephants,” it highlights how great‑power rivalry, defence diplomacy, and militarisation risk marginalising Pacific priorities while increasing expectations and constraints on small states. At the same time, the erosion of multilateral institutions, particularly in climate governance, development assistance, and global rule-making, disproportionately affects Pacific countries that have long relied on collective diplomacy to amplify their voices. The chapter stresses that Pacific leaders are neither passive nor naïve: they are actively shaping regional norms through initiatives such as the Boe Declaration, the Blue Pacific narrative, climate litigation, and leadership on renewable energy and fossil‑fuel non-proliferation. The chapter calls for greater investment in Pacific‑led strategic dialogue, the protection of sovereign strategic spaces, and strengthened education and capacity‑building in diplomacy and security, arguing that genuine listening and partnership are essential if Pacific countries are to navigate an increasingly fractured international order on their own terms.

Thematic spotlights:

“Asia-Pacific’s green leadership: From vision to implementation” authored by Christoph Nedopil (Griffith Asia Institute) and Fabby Tumiwa (Institute for Essential Services Reform, Indonesia). This chapter examines Asia‑Pacific’s green transition at a moment of escalating climate impacts and rising economic risk, arguing that the region faces immense adaptation costs even as it becomes a global leader in climate solutions. It highlights four interlinked themes: the widening adaptation finance gap amid intensifying disasters; rapid advances in green technologies such as renewables, battery storage, hydrogen, and industrial decarbonization—largely driven by China and supported by regional peers; the resilience of green finance in Asia despite global ESG backlash, alongside persistent governance and transition‑finance challenges; and the growing importance of regional cooperation through ASEAN, BRICS, and other coalitions as multilateral climate processes stall. The chapter concludes that Asia‑Pacific is increasingly charting an autonomous green pathway, where scaling affordable green technologies, closing the adaptation finance gap, managing legacy fossil assets, and strengthening regional collaboration are critical to safeguarding economic resilience and climate security.

“Central banks and SDGs: A South Asian perspective”, authored by Mohd Avi Hossain (United Nations Bangladesh ) and Iyanatul Islam (Griffith Asia Institute). This chapter analyses how South Asian central banks are moving beyond their traditional mandates of price and financial stability to play a more active role in advancing the Sustainable Development Goals (SDGs). Using case studies from Bangladesh, India, Pakistan, Nepal, and Sri Lanka, it examines de jure mandates and de facto practices, focusing on central bank contributions to gender equality (SDG 5), decent work and economic growth (SDG 8), climate action (SDG 13), and global partnerships (SDG 17). The chapter highlights initiatives in gender‑inclusive finance, financial inclusion, green finance, and international cooperation, while revealing significant cross-country disparities. It concludes that South Asian central banks have substantial untapped potential to act as agents of inclusive and sustainable development if institutional capacities, data systems, and international engagement are strengthened.

“Meeting the challenges from mis- and disinformation in the Pacific: Issues and policy responses”, authored by Damián Cardona Onsés (United Nations Information Centre) and Luis Cabrera (Griffith Asia Institute). This chapter examines the growing threat of mis‑ and disinformation in the Pacific Islands region, highlighting how rapidly expanding digital connectivity has amplified risks to climate action, public health, electoral integrity, and social cohesion. Drawing on regional experiences and United Nations initiatives, it shows how false and misleading information has undermined responses to climate change, fuelled deadly public‑health crises such as vaccine hesitancy, and heightened tensions around elections and community relations. The chapter argues that Pacific states face disproportionate harms due to structural vulnerabilities, while emphasising that effective responses must protect freedom of expression and human rights. It concludes by outlining practical policy pathways, including strengthening media integrity, community-based communication, prebunking strategies, regional cooperation, and UN-backed frameworks, to enhance information resilience and ensure Pacific communities remain active guardians of trust, truth, and democratic stability.

We conclude this editorial with a quote attributed to Leonardo da Vinci, “I have been impressed with the urgency of doing. Knowing is not enough; we must apply. Being willing is not enough; we must do.” Long invoked to emphasise the primacy of action, this quote captures precisely the urgency we have felt throughout our work on GAPSO 2026.

What it means for Australia

Australia faces a strategic landscape where traditional certainties have dissolved. To secure our interests in 2026, policy must shift from reactive management to proactive strategic autonomy.

Redefining the US alliance and geopolitics

The US transition toward the Donroe Doctrine and aggressive threats to the sovereignty of key allies (e.g., Canada, Denmark) necessitate a sophisticated recalibration. Australia must:

Decouple security from subservience: View the US as a vital but volatile partner. We must learn from our partners in Europe and Canada to understand and establish “red lines” where US actions infringe on Australian sovereignty or regional stability.
Broaden the security lens: Move beyond treating China as an existential threat and instead recognise it as a consequential regional actor, whose influence and participation in regional architecture are unavoidable. The more acute strategic risk lies not in China’s rise per se, but in the erosion of the rules-based order. Framing regional insecurity primarily through a China-centric threat narrative obscures these dynamics and limits the scope for inclusive, resilient regional governance.
Trade and the green transition

With China, India, and Korea reaching “peak coal,” Australia’s export model faces an existential deadline.

Pivot to Green Cost Leadership: Accelerate the transition from fossil fuel exports to green steel, critical minerals, green AI processing and renewable energy exports.
Address Demographic Shifts: Respond to China’s youth unemployment and demographic contraction by diversifying education exports and deepening ties with emerging Southeast Asian markets.
Strategic investment rebalancing

Current expenditure outweighs low-probability defence risks while underfunding high-certainty climate risks.

Climate as National Security: Shift public investment toward climate adaptation and the $764 billion regional grid upgrade. The “gridlock risk” in Asia is a greater threat to Australian trade than conventional military conflict.
Regionalism and middle power agency

To avoid being perceived as the “long arm of the USA,” Australia must lean into pragmatic regionalism.

Strategic Autonomy: Strengthen the ASEAN Digital Economy Framework Agreement (DEFA) and CPTPP. Australia should act as a “trusted bridge” rather than a deputy to a hegemon.
COP31 Leadership: Use the 2026 presidency of COP31 to champion a “Green Asia-Pacific.” This is the premier opportunity to lead on adaptation finance and the phase-out of legacy fossil assets, proving Australia’s value as an independent regional leader.

Australia must accept that 2025 was a “hinge year.” Our compass must now be set toward a future where our security is found in regional integration and green innovation, rather than outdated dependency.

Conclusion: A consolidated compass for 2026

As this edition makes clear, 2026 demands not incremental adjustment but deliberate direction-setting. The complete Griffith Asia Pacific Strategic Outlook 2026: Asia’s role in a world unhinged: From disruption to direction—edited by Christoph Nedopil and Gloria Ge—is now available as a downloadable PDF, bringing together all regional and thematic policy briefs in one integrated volume.

We also invite readers to join the official GAPSO 2026 launch at a joint AIIA–Griffith Asia Institute event, Asia’s role in a world unhinged: From disruption to direction, held in person and online. Director Christoph Nedopil and Deputy Director Gloria Ge will present the key findings and discuss Asia’s changing role in a fragmenting international order. The seminar will explore the major strategic transitions shaping the region—from escalating geopolitical risks and shifting alliance structures, to green and digital leadership, the rise of pragmatic regionalism, and the emergence of new financial architectures—alongside expert regional briefings on China, Southeast Asia, South Asia, and the Pacific.

At a time when established institutions appear increasingly strained and the certainties of the past are fading, GAPSO 2026 offers both diagnosis and direction. We encourage readers to download the full report and join the conversation as Asia-Pacific decision-makers move from disruption toward purposeful, values-driven action.

AUTHORS

Professor Christoph Nedopil is the Director of the Griffith Asia Institute and Associate Professor Gloria Ge is the Deputy Director.

Notes and references

[i] Heifetz, R. A. Leadership without Easy Answers. (Belknap Press of Harvard University Press, Cambridge, Mass, 1994); Heifetz, R., Grashow, A. & Linsky, M. Leadership in a (Permanent) Crisis. Harv. Bus. Rev. July-August 2009, 62–69 (2009).

[ii] Kemish, I. Australia needs to get real about Trump’s changing America. The Conversation http://theconversation.com/australia-needs-to-get-real-about-trumps-changing-america-274424 (2026) doi:10.64628/AA.dk9pm7vyd.

[iii] SIPRI Military Expenditure Database. Stockholm International Peace Research Institute (2024).

[iv] America’s raid on Venezuela reveals the limits of China’s reach. The Economist (2026).

[v] Farquharson, J., Mardell, J. & des Garets Geddes, T. China’s Policy and Intellectual Debates | Sinification: January 2026. Sinification

[vi] Cazzaniga, M. et al. Gen-AI: Artificial Intelligence and the Future of Work. https://www.cef.imf.org/content/dam/CEF-IMF/CEF-IMF-NewSite/3-News/1-CEFNewsandEvents/3-SeminarsWebinarsandHigh-levelEvents/2024-05-07%20-%20Webinar%20on%20Gen-AI%20Artificial%20Intelligence%20Slides.pdf (2024).

[vii] Myllyvirta, L. Analysis: Coal power drops in China and India for first time in 52 years after clean-energy records. Carbon Brief https://www.carbonbrief.org/analysis-coal-power-drops-in-china-and-india-for-first-time-in-52-years-after-clean-energy-records/ (2026).

[viii] Rathi, A. India Is Electrifying Faster Than China Using Cheap Green Tech. Bloomberg.com (2026).

[ix] TNB, EDL, EGAT Advance ASEAN Power Grid Through Energy Wheeling Agreement Phase 2 under LTMS-PIP 2.0. Enlit Asia 2026 https://www.enlit-asia.com/latest-news/tnb-edl-egat-advance-asean-power-grid-through-energy-wheeling-agreement-phase-2-under-ltms-pip-20.

[x] International Energy Agency (IEA). Energy and AI. https://www.iea.org/reports/energy-and-ai/energy-supply-for-ai (2025).

[xi] ADB and World Bank Group Launch the ASEAN Power Grid Financing Initiative with the ASEAN Secretariat and the ASEAN Centre for Energy (ACE). ASEAN Main Portal https://asean.org/adb-and-world-bank-group-launch-the-asean-power-grid-financing-initiative-with-the-asean-secretariat-and-the-asean-centre-for-energy-ace/ (2025).

[xii] Nedopil, C. Trump is pushing allies to buy US gas. It’s bad economics – and a catastrophe for the climate. The Conversation http://theconversation.com/trump-is-pushing-allies-to-buy-us-gas-its-bad-economics-and-a-catastrophe-for-the-climate-266792 (2025) doi:10.64628/AA.ec7ehhgcq.

[xiii] World Trade Organization (WTO). Global Trade Outlook and Statistics. https://www.wto.org/english/news_e/news25_e/stat_07oct25_e.pdf (2025).

[xiv] Feingold, S. & Pfister, A.-K. ASEAN takes major step toward historic digital economy pact. World Economic Forum https://www.weforum.org/stories/2025/10/asean-defa-digital-economy-pact-negotiations/ (2025).

[xv] ASEAN. ASEAN Economic Community (AEC) Strategic Plan 2026-2030 of the ASEAN Community Vision 2045. https://asean.org/wp-content/uploads/2025/06/AEC-Strategic-Plan-2026-2030.pdf (2025).

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