US-CHINA RIVALRY DRIVES ASIA-PACIFIC GEOPOLITICS AND SECURITY IN 2026

The United States-China rivalry remains the dominant force shaping Asia-Pacific geopolitics, regional security priorities, and economic governance throughout 2026. Washington and Beijing are intensifying competition across the region while instability persists on the Korean Peninsula and China grapples with internal vulnerabilities. Japan and South Korea are consolidating their alliances with the United States, with Japan committing a record nine trillion yen to defense including hypersonic missiles and drones. Fitch Ratings warns that Asia-Pacific economies face a fragile outlook due to slowing Chinese growth, U.S. tariffs, and heightened geopolitical tensions weighing on trade and debt dynamics.