Asia, explained.

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The logic of neutrality in the Indo-Pacific

Regional governments use deliberate ambiguity to extract benefits from both United States and China while avoiding costly commitments to either.

Vincent So

10 June 20254 min read

The dominant strategic narrative presents the Indo-Pacific in binaries: democracies versus autocracies, the US-led order versus China’s challenge, AUKUS versus the PLA Navy. But this framing is not shared by many of the countries at the heart of the region. A quieter, older tradition is re-emerging, neither anti-Western nor pro-China, but determinedly neutral.

Neutrality is returning not as a moral evasion, but as a strategic operating system: adaptive, transactional, and attuned to the realities of geography, power asymmetry, and domestic constraint. From Indonesia and India to Vietnam and the Pacific Islands, neutrality is increasingly the rule, not the exception.

The question for Australia and its allies is whether they can work with this world, or only in opposition to it.

Not new, but reborn

Non-alignment is not new in Asia. It shaped Cold War politics through the Bandung Conference and the Non-Aligned Movement. What is new is the form it is taking: less ideological, more technocratic.

Governments are resisting alignment not out of romantic idealism, but from an instinct to hedge. They want investment from China, security ties with the United States, and policy space from both.

In much of Asia, the priority is not a global contest of systems, but the local management of vulnerabilities.

The Philippines is a case in point. After pivoting towards Beijing under Rodrigo Duterte, Manila is now swinging back to Washington, cautiously, and not without insurance. Indonesia has avoided US-led statements on the South China Sea while quietly deepening defence ties with Australia and Japan. Vietnam signs strategic partnerships with both Washington and Moscow while keeping Beijing close enough to manage.

This is not indecision. It is insurance.

The limits of binary expectations

For all the talk of a values-based Indo-Pacific order, many regional states view their interests as fundamentally non-binary. They live in China’s neighbourhood. Their economies depend on Chinese trade, tourism, or capital. At the same time, their defence establishments see the United States and its allies as essential to regional stability. But even that alignment is risky. The unpredictability of successive US administrations has made many governments wary of tying their fate too tightly to Washington’s swings.

Neither camp offers a complete solution. The West demands alignment on principle. China demands alignment on silence. Neither satisfies. The result is a preference for ambiguity: saying little, doing enough, and buying time.

This is not an abdication of responsibility, it is an expression of it. In much of Asia, the priority is not a global contest of systems, but the local management of vulnerabilities.

Neutrality, updated

Neutral states are not passive. They are entrepreneurial. Singapore positions itself as a “useful” partner to all. India champions the Global South while deepening “Quad” ties. Indonesia expands its submarine fleet while hosting the China-ASEAN Expo. Fiji engages both Beijing and Canberra, then plays them off each other.

This is not fence-sitting. It is leverage-building.

The ability to say “no” to both Washington and Beijing is, paradoxically, what gives these countries relevance. The more they are courted, the more they can extract. This is the new art of neutrality: using ambiguity to gain agency.

The rise of the deterrence float

In financial markets, a “float” is the period between a transaction and its settlement, a window where value exists without commitment. Many Indo-Pacific states are operating on a “deterrence float”: signalling readiness to align with the United States or its allies, while deferring irreversible choices.

This lets them benefit from deterrence postures without being drawn into their execution.

The wrong kind of pressure

Western frustration with neutrality is understandable but counterproductive. It pressures states to speak in binary terms they cannot afford. Small and medium powers in Asia have no desire to be theatres of someone else’s contest. Nor are they naïve about China. But they understand that antagonising Beijing carries real, immediate costs. Public support for deterrence can evaporate quickly when exports or tourism are hit.

If the West treats neutrality as betrayal, it will corner governments into uncomfortable decisions, and many may not choose the alliance system.

Can the alliance model adapt?

The real test is whether the United States and its allies, including Australia, can work with neutral states without demanding uniformity. That means building defence and intelligence ties even where there is no shared China policy. It means investing in connectivity and supply chains without political preconditions. And it means listening, not just messaging.

Partnerships must be modular, not monolithic. Hedging must be accommodated as reality, not viewed as defection. Neutrality complicates alliance management and weakens deterrence clarity. But effective strategy requires empathy, the ability to understand how others perceive cost, risk, and power.

Rather than lament the return of neutrality, the West should study its logic. It is not a failure of commitment. It is a mechanism for survival. And in a region this complex, survival on one’s own terms is itself an achievement.

The Indo-Pacific will not be won by forcing countries to choose. It will be shaped by how well the major powers navigate those who refuse to.

About the author

Vincent So

Vincent So is CEO of the Thoracic Society of Australia and New Zealand. Views are his own and not of his employer.

Topics

Asia Defence & security