The Pacific Islands and their vast expanse of ocean have never been a major source of traditional military threats. The post-World War Two security architecture of the Pacific has historically been dominated by the United States. Yet today, China’s diplomatic and economic push into the Pacific is incrementally reshaping the strategic landscape. While its presence in the region is not new, Beijing has capitalised on the dissonance between Washington and the Pacific Island nations by steadily and significantly expanding its commercial and geopolitical clout. As a result, ten of the fourteen Pacific Island nations now recognise the One China policy, which warrants considerable attention from the United States and other regional actors such as Australia.
In 2014, China’s GDP based on purchasing power parity has overtaken that of the United States. Though the US is still regarded as the world’s major economy, trends are shifting away from the narrative of a post-Cold War hegemony of liberal democracies. In light of such circumstances, this analysis assesses how Chinese development finance and investment in the Global South is shaping both, current geopolitics and the internal structure of Pakistan and Indonesia.