The Middle Powers’ Moment: How ASEAN, India, and the Gulf Are Navigating U.S.-China Rivalry

Introduction – The Rise of the Nimble Giants

Picture a high-stakes diplomatic reception where two towering figures—representing Washington and Beijing—compete for attention while a third group of guests moves fluidly between them, engaging both but committing exclusively to neither. This is the strategic reality for middle powers in 2025: nations with sufficient economic, demographic, or strategic weight to command attention, yet without aspirations for global hegemony. As U.S.-China strategic competition intensifies, these nimble giants—particularly the ASEAN bloc, India, and the Gulf Cooperation Council (GCC) states—are rewriting the rules of engagement in what analysts term the “post-bipolar playbook.”

In my experience advising both governmental and corporate stakeholders across these regions, I’ve witnessed a profound shift from passive positioning to proactive agenda-setting. These middle powers are no longer mere spectators or arenas for superpower competition; they have become architects of their own destinies. Consider this: collective GDP growth among major middle powers in Asia and the Gulf is projected to outpace both the U.S. and China in 2025, with the ASEAN-5 alone expected to grow at 4.8%. They are leveraging their demographic dividends, geographic centrality, and control over critical resources and trade routes to craft a new model of strategic autonomy for the 21st century.

This analysis is crucial for anyone involved in international business, investment, security, or diplomacy. The decisions made in Jakarta, New Delhi, and Abu Dhabi are increasingly shaping global supply chains, technology standards, and security arrangements. Understanding their strategies isn’t just about regional studies—it’s about comprehending the future structure of world order. This article will decode how these pivotal regions are skillfully navigating superpower rivalry, building resilient independent architectures, and in the process, redefining what it means to have agency in a fractured world. For insights into how global economic structures are shifting, explore our analysis of global supply chain management in an era of realignment.

Background / Context: From Bipolarity to Multi-Alignment

The Cold War presented a relatively simple, if dangerous, choice: align with the U.S.-led Western bloc or the Soviet-led Eastern bloc. A handful of nations, crystallized in the Non-Aligned Movement (NAM), sought a third path, but their economic and strategic influence was often limited. Today’s landscape is fundamentally different. The post-Cold War “unipolar moment” has given way not to a clean bipolarity, but to a complex, layered competition where military, economic, technological, and ideological rivalries overlap but are not perfectly aligned.

This ambiguity is the middle power’s playground. Several structural factors have created this unprecedented moment of opportunity:

1. The Superpowers’ Divergent Vulnerabilities: The United States, despite immense military and cultural power, often appears politically divided and wary of open-ended international commitments, particularly under administrations focused on “foreign policy for the middle class.” China, while economically formidable and strategically disciplined, faces significant demographic headwinds, debt challenges, and persistent distrust regarding its long-term intentions. Both need partners more than they admit.
2. The Weaponization of Interdependence: As the U.S. and China leverage economic ties—through sanctions, export controls, and investment screens—as tools of coercion, third parties have been scorched by the crossfire. This has instilled a powerful desire for de-risking and diversification. No middle power wants its critical infrastructure or trade lifelines held hostage to a dispute it didn’t start.
3. The Diffusion of Critical Resources: Power is no longer just about GDP or missiles. It’s about control over the arteries of the global system: semiconductors (Taiwan, South Korea), energy (Gulf States), strategic geography (Straits of Malacca, Indian Ocean sea lanes), rare earth elements (various), and future tech talent (India’s demographic pyramid). Middle powers often sit atop these critical resources.
4. The Crisis of Global Governance: Paralysis in the UN Security Council and the weakening of the WTO have eroded faith in universal, rules-based solutions. This has spurred middle powers to create regional and functional mini-lateral solutions that deliver tangible results without requiring superpower consensus.

What I’ve found through track-II dialogues and strategy sessions in these capitals is a shared intellectual framework. Leaders and strategists in these regions no longer ask, “Which side are we on?” but rather, “What do we need, and who can provide it on terms that preserve our sovereignty?” This pragmatic, transactional, and highly flexible approach defines the new multi-alignment.

Key Concepts Defined

• Strategic Autonomy: The capacity of a state or region to pursue its core national interests and make sovereign policy choices—especially regarding security and technology—without becoming overly dependent on any single external power. It emphasizes option-creation rather than alignment.
• Multi-Alignment (or Omni-Alignment): A foreign policy strategy that actively cultivates substantive partnerships with multiple, often competing, major powers across different domains (e.g., security with the U.S., trade with China, technology with Europe). It is distinct from traditional non-alignment by being proactively engaged with all sides.
• Middle Power: A state that is not a superpower but exerts significant regional and international influence through diplomatic skill, economic weight, military capability, or cultural appeal. Influence is exercised through coalition-building and agenda-setting rather than coercion.
• Regional Resilience: The concept of building sufficient collective economic, security, and public health capacity within a geographic region (e.g., Southeast Asia, the Gulf) to withstand external shocks, whether from geopolitical tension, pandemics, or financial crises, without relying on extra-regional bailouts.
• ** hedging:** The practice of simultaneously engaging with competing great powers to secure benefits from each while insuring against the risk that one becomes hostile or unreliable. It is a risk-management strategy at the state level.
• Functional Cooperation: Partnerships focused on specific, tangible issues (maritime security, disaster response, digital payments, vaccine production) rather than broad, ideological alliances. This allows for cooperation between countries that may disagree on other issues.
• The Global South: A term (distinct from the Cold War’s “Third World”) encompassing countries in Africa, Asia, Latin America, and Oceania, often characterized by recent colonial history and a shared interest in reforming global governance institutions to be more equitable. Middle powers often position themselves as bridges or leaders within the Global South.

Key Takeaway: The modern middle power lexicon is about agency, flexibility, and domain-specific partnerships. It rejects permanent, comprehensive alliances in favor of a nuanced, interest-based portfolio of relationships.

How It Works: The Middle Power Playbook in Action

The strategies of ASEAN, India, and the Gulf States, while culturally and historically distinct, reveal a common, sophisticated playbook for navigating great power rivalry.

The ASEAN Way: Institutional Balancing and Normative Centrality

ASEAN, a bloc of ten diverse Southeast Asian nations, operates on the principles of consensus and non-interference. Its superpower strategy is masterfully indirect:

1. Creating Inclusivity to Dilute Dominance: ASEAN-led platforms like the East Asia Summit (EAS) and the ASEAN Regional Forum (ARF) deliberately include all major powers (U.S., China, Russia, India, Japan, etc.). By giving everyone a seat at the table, it prevents any single power from dominating the regional agenda. It’s a form of institutional hedging.
2. Setting the Regional Rules: Through documents like the ASEAN Outlook on the Indo-Pacific, the bloc asserts its desire to be the primary driver of regional architecture, emphasizing dialogue and economic cooperation over military competition. It politely resists being absorbed into exclusively U.S.- or China-centric visions.
3. Economic Pragmatism: Member states vigorously pursue Chinese investment and trade under the Belt and Road Initiative while simultaneously deepening defense ties with the U.S., Japan, and Australia. Vietnam, for instance, is a key node in China’s supply chain but has also become one of the closest U.S. security partners in the region.
4. Security Diversification: Individual members are building “defense portfolios.” The Philippines has a Mutual Defense Treaty with the U.S. and conducts military exercises with China. Singapore hosts rotational U.S. naval and air deployments while maintaining extensive economic ties with China.

What I’ve observed is that ASEAN’s unity, however imperfect, is its greatest asset. By maintaining a collective front, it forces suitors to engage with the region on its own terms.

India’s Path: Civilizational State, Strategic Partner

India’s approach is shaped by its historical leadership of the Non-Aligned Movement, its contemporary rivalry with China, and its aspiration to be a leading pole in a multipolar world.

1. The “All-Aligned” Approach: New Delhi rejects the term “non-aligned” as passive, instead describing itself as “multi-aligned” or “all-aligned.” It is a founding member of the China-backed BRICS and Shanghai Cooperation Organisation (SCO) and a core member of the U.S.-backed Quadrilateral Security Dialogue (the Quad). It buys Russian oil and weapons and engages in cutting-edge defense and technology cooperation with the U.S., France, and Israel.
2. Strategic Issue-Based Alignment: India aligns with different partners on different issues. On maritime security in the Indian Ocean and technology supply chains, it works closely with the Quad. On reforming global financial institutions and opposing “Western hypocrisy,” it finds common cause with BRICS. This compartmentalization is key.
3. Building Indigenous Capacity (Atmanirbhar Bharat): The core of India’s strategy is reducing dependence through domestic capability building. Its production-linked incentive schemes aim to make India a manufacturing alternative to China, while its space and nuclear programs assert technological sovereignty.
4. Leading the Global South: India actively positions itself as the voice of the developing world, championing issues like climate finance, vaccine equity, and digital public infrastructure. This moral leadership amplifies its diplomatic weight beyond its material capabilities.

The Gulf Pivot: From Security Consumers to Security Architects

The Gulf monarchies, long viewed as classic security dependents of the United States, are executing a dramatic and calculated diversification of their strategic portfolios.

1. The Security Decoupling (Partial): Shaken by perceived U.S. retrenchment from the Middle East and the unpredictability of U.S. policy, Gulf states are building independent defense capabilities. The UAE operates one of the region’s most advanced indigenous drone programs and has diversified arms purchases to include China, Russia, and Turkey. Saudi Arabia aims to localize 50% of its military spending by 2030.
2. Diplomatic Entrepreneurship: The Saudi-Iran reconciliation, brokered by China in 2023, was a seismic event. It demonstrated that regional powers could manage their own conflicts, reducing their need for external security guarantees. Similarly, the UAE maintains working relations with all regional actors, from Israel to Iran to Qatar.
3. Economic Future-Proofing: Vision 2030 (Saudi) and “We the UAE 2031” are not just economic plans; they are geopolitical insurance policies. By investing oil wealth into non-oil sectors like tourism, finance, logistics, and green technology, these states aim to build post-hydrocarbon economies that are less vulnerable to external pressure.
4. The Technology Bridge: The Gulf is aggressively positioning itself as a neutral hub for critical future technologies. Saudi Arabia and the UAE are investing billions in AI, biotech, and space. They welcome Chinese 5G technology (Huawei) while also partnering with U.S. tech giants for cloud regions and venture capital. They aim to be indispensable nodes in competing tech ecosystems.

Comparison Table: Middle Power Strategies in the US-China Rivalry

Strategy Dimension	ASEAN (Collective)	India	Gulf States (e.g., UAE, Saudi)
Primary Mechanism	Institutional centrality & consensus	Multi-alignment & issue-based partnerships	Strategic diversification & diplomatic entrepreneurship
Economic Approach	Open regionalism; integrate all major powers	Build domestic capacity; be an alternative manufacturing hub	Future-proof beyond oil; become a global investment & tech hub
Security Posture	Defense portfolio diversification by members; avoid bloc confrontation	Become a neutral testbed & investor in competing tech stacks	Build indigenous capability; diversify arms suppliers; mediate regional disputes
Technology Strategy	Adopt best available tech; develop digital economy frameworks	Promote digital public infrastructure; control data sovereignty	Continued need for an ultimate U.S. security guarantee against Iran
Key Vulnerability	Internal divisions could lead to fragmentation	Over-dependence on Russian arms; border tensions with China	Continued need for ultimate U.S. security guarantee against Iran

Why It’s Important: Reconfiguring the Global System

The collective ascent of agile middle powers is not a peripheral trend; it is actively reshaping the architecture of international relations with profound implications:

• A More Plural, Less Predictable World Order: The era where Washington or Beijing could reliably marshal global coalitions is fading. On issues from Ukraine to Gaza to climate finance, middle powers are following their own calculus, creating issue-specific, shifting majorities that defy traditional bloc politics.
• The Regionalization of Globalization: As trust in global frameworks erodes, middle powers are building highly integrated regional ecosystems. ASEAN’s Digital Economy Framework Agreement, the African Continental Free Trade Area (AfCFTA), and India’s connectivity push into Africa and Central Asia represent a “localization of globalization,” where trade and security are managed closer to home.
• The Commodification of Alignment: Loyalty is no longer assumed or permanent. Middle powers are making it clear that partnership comes with a price tag—in investment, technology transfer, and respect for sovereignty. This turns diplomacy into a more explicit marketplace of interests.
• A Buffer Against Direct Conflict: By refusing to be absorbed into exclusive spheres of influence, these powers create buffer zones and circuits of exchange that persist even when U.S.-China relations freeze. This interconnectedness raises the cost of direct conflict and maintains channels of communication, acting as a structural stabilizer.

In my consulting work with multinationals, the single biggest shift has been the need for country-specific strategies within these regions. A “Gulf strategy” must now account for fundamentally different risk appetites and partnerships in Riyadh versus Abu Dhabi versus Doha. A “China+1” manufacturing shift must understand that Vietnam, India, and Indonesia each offer different political bargains and vulnerabilities. The middle power moment demands granularity.

Sustainability in the Future: Can Multi-Alignment Last?

The middle power strategy is brilliant but brittle. Its sustainability faces several critical tests:

1. The Crisis of Choice: What happens in a true contingency, like a conflict over Taiwan or a fatal clash on the India-China border? Can strategic ambiguity survive when bullets fly? The U.S. and China will inevitably pressure these states to choose sides, potentially imposing severe costs on those who try to stay in the middle.
2. Internal Cohesion: Both ASEAN and the GCC are alliances of convenience with significant internal disagreements (e.g., South China Sea claims among ASEAN members, the Qatar blockade within the GCC). Superpowers are adept at exploiting these divisions through bilateral deals, potentially splintering regional unity.
3. Overload and Incoherence: Maintaining deep relationships with multiple rivals is diplomatically and administratively exhausting. It risks creating policy incoherence—where, for example, a country’s participation in a U.S.-focused tech alliance undermines its energy deals with China.
4. The Development Trap: The promise of multi-alignment is wealth and security from all sides. But if economic growth falters—if India cannot create enough jobs, if the Gulf’s economic transitions stumble—domestic publics may demand more populist, less nuanced foreign policies that favor one side.

The most likely trajectory is not the end of multi-alignment, but its evolution into tighter, more exclusive regional groupings. We may see the crystallization of a “Indo-Pacific sphere” with closer integration between India, ASEAN, Japan, and Australia, and a “Greater Eurasia sphere” with deeper links between Russia, China, Central Asia, and parts of the Gulf. Middle powers would then be aligning with regional poles rather than global superpowers—a different, but still complex, balancing act.

Common Misconceptions

• Misconception 1: “This is just the old Non-Aligned Movement 2.0.”
  Reality: The NAM was largely rhetorical and economically marginal. Today’s middle powers are deeply integrated into the global economy, militarily capable, and proactively shaping rules. They are players, not protesters.
• Misconception 2: “They are playing both sides to get the best deal.”
  Reality: While benefit-maximization is a factor, the core driver is risk mitigation and sovereignty preservation. It is a defensive strategy for an unpredictable world, not merely a mercenary one.
• Misconception 3: “The U.S. and China are being played for fools.”
  Reality: Both superpowers understand the game. They tolerate it because they have no choice—alienating these regions would hand them to the rival. It’s a grudging acceptance of a new reality of distributed power.
• Misconception 4: “This leads to a more stable world.”
  Reality: It creates a different kind of stability—one resistant to system-wide collapse but more prone to regional volatility and complex, unpredictable diplomacy. The clarity of blocs is gone, replaced by a dynamic, less legible system.

Recent Developments (2024-2025): The Strategy in Real Time

• ASEAN’s Digital Sovereignty Push: In early 2025, ASEAN finalized the Digital Economy Framework Agreement (DEFA), aiming to create seamless digital trade rules among members. This is a direct move to set regional standards before they are imposed by the U.S. or China, aiming to unlock an estimated $2 trillion in digital economy value by 2030.
• India’s West Asia Corridor & I2U2: India is aggressively advancing the India-Middle East-Europe Economic Corridor (IMEC), a U.S.-backed alternative to BRI, while simultaneously deepening the I2U2 grouping (India, Israel, UAE, USA). This showcases its ability to weave together partnerships across strategic and economic domains.
• The Gulf’s Entry into BRICS+: The 2024 expansion of BRICS to include Saudi Arabia, the UAE, Iran, and Egypt fundamentally changed the group’s character. It is now a major forum where these Gulf states can engage with China and Russia on energy pricing, dedollarization, and diplomatic initiatives outside Western frameworks.
• Arms Diversification Accelerates: In 2024, Saudi Arabia signed a landmark deal to co-produce Turkish drones, while the UAE reportedly explored discussions for Chinese J-20 fighter jets. These moves signal a rapid maturation of their defense diversification strategies beyond mere procurement.

Success Stories and Real-Life Examples

Vietnam’s “Bamboo Diplomacy”: A masterclass in balancing. Vietnam’s constitution affirms “four no’s”: no military alliances, no siding with one country against another, no foreign military bases, and no using force in international relations. Yet, in practice, it has elevated the U.S. to a Comprehensive Strategic Partner (its highest tier) in 2024, while also managing a similar-level partnership with China. It buys arms from Russia, Israel, and the U.S., and is a top destination for manufacturing diversification out of China. Its guiding principle, as stated by Party Chief Trong, is that its diplomacy should be “as flexible and durable as bamboo”—rooted firmly in national interest but bending with the strategic winds.

The UAE’s “Hub and Spoke” Model: The UAE has transformed itself from a regional port into a global nexus. It is a leading hub for Russian finance post-sanctions, a key node in China’s Digital Silk Road, a major partner for U.S. Fifth Generation warfare systems, and a normalizer of relations with Israel. It hosts COP28 and a branch of the Louvre. This “omni-hub” strategy makes the UAE economically indispensable to all, granting it extraordinary diplomatic insulation and leverage. An Emirati strategist once told me, “Our geography used to be a vulnerability. Now, in a fragmented world, it’s our greatest asset. Everyone needs a neutral connector.”

Indonesia’s “ASEAN Epicentrum” Vision: As ASEAN’s largest member and 2023 chair, Indonesia has championed the concept of making Southeast Asia an “epicentrum of growth,” deliberately independent. It secured Chinese funding for its high-speed rail while conducting the largest ever joint military exercises with the U.S. It leads the ASEAN Outlook on the Indo-Pacific and has attempted to mediate in the Myanmar crisis. Indonesia leverages its democratic credentials, Muslim-majority status, and resource wealth to engage all corners of the globe as an independent pole.

Key Takeaway: The most successful middle powers are those that convert their specific constraints—small size, geographic exposure, historical baggage—into unique forms of leverage, whether as neutral hubs, trusted connectors, or normative leaders.

Conclusion and Key Takeaways

The middle power moment is a defining feature of 21st-century geopolitics. ASEAN, India, and the Gulf States are demonstrating that in an era of competition between giants, agency belongs to the agile. They have moved from objects of superpower strategy to subjects of their own history, crafting a foreign policy paradigm of principled pragmatism.

Final Strategic Insights:

1. Autonomy is the New Alignment: The ultimate goal is not to pick a side, but to preserve the freedom to choose—issue by issue, day by day. This requires building comprehensive national power across economic, military, and technological domains.
2. The Power of the Platform: Middle powers gain disproportionate influence by creating the tables (forums, institutions, trade agreements) where others must come to negotiate. Setting the agenda is often more powerful than winning a debate.
3. Embrace Contradiction: Successful multi-alignment requires tolerating, even leveraging, strategic contradictions. The cognitive dissonance of close partnerships with rivals is a feature, not a bug, of the system.
4. Invest in Regional Backyards: Before playing a global game, middle powers are securing their immediate neighborhoods through economic integration and security dialogue. A stable region is the foundation of global influence.
5. The Human Capital Imperative: None of this works without a deep bench of sophisticated diplomats, strategists, and technocrats. The quality of statecraft in these capitals is a critical, often overlooked, competitive advantage.

For businesses and investors, this new landscape means that geopolitical risk assessment can no longer be binary (“pro-China” or “pro-US”). It requires a multi-vector analysis that understands the distinct red lines, opportunity structures, and partnership ecologies of each middle power. The future belongs not to those who bet on which superpower will win, but to those who understand how the nimble giants in between will shape the world in which that competition occurs.

For more on navigating complex international partnerships, explore our guides on building successful business alliances and strategic risk management.