BEN MORGAN: Pacific Update – Discussing geo-political and military activity in the Pacific.

Shangri La Dialogue 2026 – Notable Trends

The Institute for International and Strategic Studies (IISS) Shangri La Dialogue is the Indo-Pacific region’s most important annual defence conference. It attracts defence leaders, officials, policy makers, and academics from Asia, the US, the Pacific and Europe to the Shangri La Hotel in Singapore to discuss international security issues. This year’s conference highlighted several important trends in Pacific security.

The region is concerned about security and is investing heavily in defence

Security and the threat of conflict remain key topics at the conference. Deutches World reported that IISS Senior Fellow for Southeast Asian Security and Defence – Evan A. Laksman reported to the conference that “Regional states — whether major, middle or small ones — cannot escape this worsening security environment” and that Singapore’s Prime Minister Lawrence Wong said before the conference that “The reality in this changed world is that there will be more volatility — we will be facing storm after storm.” “[i]

Statements that capture the region’s current arms race and build up of military alliances. Although Sino-American competition and the potential for conflict in Taiwan or the South China Sea are often discussed it is important to remember other conflicts in the wider Indo-Pacific region. For example, last year India and Pakistan briefly exchanged blows. Pakistan is currently fighting with Afghanistan and the civil war in Myanmar continues.

Therefore, it is no surprise that delegates spent a great deal of time discussing defence funding and collective security. A trend verified by the Stockholm International Peace Research Institute reports military spending in the Asia-Pacific rose by 8.1% in 2025 to $681 billion[ii] over the last year. Another indication of current security concerns in the Indo-Pacific region.

US reiterates its foreign policy position

An important focus of the Shangri La Dialogue is America’s relationship with the region. Therefore, the attendance of senior US officials and their statements are very important, and carefully studied. Last year, US Secretary of Defence, Peter Hegseth made an assertive speech clearly identifying China as the US’s Pacific rival.

This year, although his speech was less aggressive, Hegseth reiterated the current ‘transactional’ philosophy of US foreign policy. He described the US position stating it is a “…return to realism…” and reinforcing that as “…the 2026 US National Defense Strategy makes clear, we are charting a new course for our alliances and partnerships, one that is grounded in the realities of power and interests.”[iii]

Current US foreign policy seems to be a retreat from leadership of the democratic world, towards working transactionally with partners that share common interests. A sudden and significant change in US foreign policy, that is accompanied by pressure to contribute financially to defence or risk losing US support. A position that Hegseth articulated very clearly, stating “This is a mindset we fully embrace, the era of the United States subsidizing the defense of wealthy nations is over.[iv]”

Hegseth’s comments indicate the isolationist thinking that underpins this change. The Secretary stating that “This shift is not a matter of choice, it is a matter of strategic prudence. The National Defense Strategy makes clear that the old toothless, utopian, and globalist course of foreign policy was headed for a disaster that all changes under President Trump.”[v] An insight into the frustration some Americans feel with the existing rules-based order, that is heavily subsidised by the US.

It is a fact that the US subsidises the United Nations, including its international judicial system and a network of organistions that support commerce, and international financial institutions. Likewise, US defence spending and military power also polices the world’s oceans, and underpins key alliances like NATO and the US alliances in Asia that have deterred large wars for 80 years. This costs the US a great deal, but America has also benefited enormously from global free trade and the US dollar being the world’s reserve currency.

Benefits and influence that the current administration ignores as it focuses on transitioning the US from being the leader of the democratic world, to a partner of convenience. A policy that’s main impact is to reduce US influence in the Pacific as middle-weight powers like Japan, South Korea, Canada and Australia feel increasingly uncertain about US security guarantees and smaller nations actively look for a more stable alternative.

Hegseth’s speech this year indicates that the US is ‘tone deaf’ to the diplomatic politics of the region. Mistaking silence for tacit approval and continuing to pursue a foreign policy that seems to be designed to alienate allies and empower its rivals. A policy that redcues American influence. For instance, Australian ‘think tank’ the Lowry Institute’s blog – The Interpreter – recently reported that “According to the Lowy Asia Power Index, US power in Asia continues to fall. In a recent study by two dons at the Lee Kuan Yew School of Public Policy, Southeast Asian countries — as measured by indicators such as high-level visits and common membership in multilateral groupings – have begun to lean closer to China. The 2026 State of Southeast Asia Survey notes that US standing across various dimensions – perceptions of US economic and political-strategic influence, US leadership in free trade and the rules-based order – have each fallen.”[vi]

Data that indicates waning US influence, and supports a recent observation by the South China Morning Post on 15 April 2026 about the paucity of South-East Asian nations participating in the large, US-led Exercise Balikatan. The newspaper noted the hesitation of several South-East Asian nations to participate and stated “Analysts say that hesitation helps explain Balikatan’s place in the region: for some Asean members, it is a reassuring sign of US commitment, but joining it risks looking like a strategic choice in the sharpening rivalry between Washington and Beijing.”[vii]

Both observations indicate a trend, and US foreign policy and military leaders need to understand and work to rectify or risk losing the ‘soft power’ competition in the Pacific.

China’s absence – two years running

The 2026 conference was also notable for the absence of senior Chinese officials.[viii] The nation’s Defence Minister Admiral Dong Jun did not attend this year. Instead, China sent a group of retired officers, and academics. China’s low profile at the meeting is notable because it is the second year in a row that the country has limited its participation in the conference.

The absence of a senior Chinese delegation at this important conference is noteworthy, because it corresponds with President Trump’s term in office. Chinese diplomacy is carefully considered and it is unlikely that the absence is unplanned. Instead the decision is probably a response to the Trump administration.

My assessment is that China understands that it is winning the diplomatic battle in the region and does not need a confrontation with Hegseth. Its strategy is to present itself as a stable, sensible alternative to the US and any public diplomatic confrontation or argument with Hegseth at the Dialogue risks pulling China ‘down’ to the US’s unpopular level of discourse. China appears to believe that it is better to keep a low-profile and quietly let US foreign policy alienate Asian and Pacific nations.

India strengthening defence relationships in the region

At any conference most of the work is done over dinner or on the sidelines, and the Shangri La Dialogue is no exception. Indian diplomats were working hard in sideline discussions with several nations including Singapore and New Zealand.

We have highlighted India’s increasing interest in the Pacific since 2024 (See-Annual Review 2025[ix]) noting that since the introduction of its ‘Look East’ doctrine in 1991 India has quietly extended its interests in South East Asia and that approximately 45% of India’s foreign trade is now with South East Asia. The Modi government continued this engagement with its ‘Act East’ policy that includes security cooperation with Philippines, Malaysia and Vietnam.

So it is not a surprise that India was meeting with Singapore, a nation that controls access to the Malacca Straits, an important trade route from the Indian Ocean into Southern Asia. Or with New Zealand, a country that has recently signed a trade deal with India and is a close partner of Singapore. Both nations are part of the Five Powers Defence Arrangements that support security of the Malacca Straits.[x]

This trend is likely to continue for two reasons. The first is that India wants to expand its influence in Asia and the Pacific to secure its trade routes. The second is that smaller nations in the region are looking for alternative security partners as uncertainty about US foreign policy and fear of China’s assertive territorial claims combine to make the region less stable.

‘Five Eyes’ Intelligence Community Issues Threat Warning

The ‘Five Eyes’ intelligence partners (the US, UK, Canada, Australia and New Zealand) recently issued a warning[xi] about China’s spy agencies using Linked In and other social media platforms to gather information. Intelligence agents posing as job recruiters, then harvesting information from applicants.

Reuters reported that “Five Eyes agencies said Chinese spies were particularly targeting those who specialised in defence, foreign affairs and intelligence, and military personnel, including those stationed in the Indo-Pacific region.”

Joint warnings from ‘Five Eyes’ intelligence agencies are rare and are indicative of the changing nature of the Pacific region. The area is no longer an international backwater but is now at the centre of Sino-American competition, and contains within it a range of potential conflicts. Notably, other large powers like NATO and India are also taking a greater interest in the region because aiming to deter assertive Chinese foreign policy, safeguarding their interests in the region.

Therefore, the Pacific is now an area of global competition and discussions about its benign strategic environment and distance from competing power blocks are dated. Instead, we must accept that the world’s intelligence agencies are interested in the region and encourage higher-levels of cyber security.

Melanesian Update

A regular update on the Pacific’s least reported trouble spot; Melanesia.

Vanuatu and France contest ownership of islands

Matthew and Hunter Islands are small islands approx. 300 km (186 miles) south-east of New Caledonia, and about the same distance from Vanuatu. Ownership is being diplomatically contested between France and Vanuatu.[xii] The islands are under French authority and considered part of the New Caledonia colony. A position recognised by international law.

However, France’s ownership is at odds with traditional ownership as recognised by the indigenous people of New Caledonia and Vanuatu. The people of Vanuatu believe that the islands are spiritually important and are the home of the god Matjajiki, and contain important burial grounds. In fact, Vanuatu and Kanak leaders both recognise this tradition and signed the Keamu Accord in 2009, stating that Matthew and Hunter Islands belong to Vanuatu.

This situation is an echo of the Pacific’s colonial past. France continues to maintain colonies in the Pacific, and these small islands are important to the French because they extend New Caledonia’s Exclusive Economic Zone into profitable fishing grounds. The Sydney Morning Herald also opines that “France derives much prestige, wealth and a permanent UN Security Council seat thanks to its overseas territories and vast maritime domain, spread across multiple oceans. Now, some politicians and security analysts in France are worried that these two islands, taken from Vanuatu before its independence in 1980, could prompt sovereignty claims in other jurisdictions, from Mexico to Madagascar, if Matthew and Hunter are returned to Vanuatu.”[xiii]

This situation is notable and worth monitoring because it highlights how throughout the South West Pacific tensions between indigenous people and colonial, or post-colonial regimes need to be managed. Failure to sensitively manage these issues and reconcile historical conflicts may create potential security issues.

Solomon Islands to reset its relationship with Australia

The recent election of a new government in Solomon Islands has led to a thaw in the country’s relationship with Australia. This week Solomon Islands new Prime Minister, Matthew Wale met with his Australian counterpart Anthony Albanese and said he was keen to ‘reset’ the relationship including developing a new partnership agreement. Radio New Zealand reported that “The two prime ministers said officials from both countries would now begin negotiations on a “comprehensive” new strategic treaty between the countries, which would bring “transformational change in the relationship” and see a “significant enhancement of the bilateral development assistance partnership between the two countries.”[xiv]

A first step in the relationship reset is a review of the contentious secret security agreement that Solomon Islands signed with China in 2022. When the secret security agreement was announced it caused a diplomatic uproar as Australia and its allies responded to China’s sudden increase in influence in the small nation. Since then, Australia and its allies have been on a diplomatic offensive in Melanesia trying to reset the relationship and limit China’s security relationships in the region.

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Ben Morgan is TDBs Military Blogger