Oceania's quiet rise is changing the Pacific
Australia, New Zealand and the Pacific Islands are gaining strategic importance as competition over security, trade, technology and influence transforms the region.
FOSTER! NEWS | OCEANIA
15 SEPTEMBER 2026
THE PACIFIC MOVES CLOSER TO THE CENTRE OF GLOBAL POLITICS
The Pacific Islands have traditionally occupied a relatively small place in international politics. That is changing rapidly as strategic competition between China, the United States and their respective partners expands across the Indo-Pacific.
Australia and New Zealand remain the region's principal Western security partners, but their position is increasingly being challenged by China's growing diplomatic, economic and security engagement with Pacific Island states.
For governments across the Pacific, the competition presents both an opportunity and a risk.
More countries are offering development assistance, infrastructure investment, security cooperation and trade opportunities. At the same time, Pacific leaders are concerned that their countries could become increasingly exposed to major-power rivalry.
The result is a regional environment in which security, development and geopolitics are becoming closely connected.
CHINA'S EXPANDING PRESENCE
China's relationship with the Pacific has grown considerably over the past decade.
Beijing has established or strengthened diplomatic relations with several Pacific Island governments and has increased cooperation in infrastructure, trade, education, telecommunications and development.
China's approach is part of its broader Indo-Pacific strategy, but Pacific governments generally view the relationship through a more immediate lens: roads, ports, telecommunications, investment, scholarships and access to Chinese markets.
That distinction is important.
While Washington and Canberra focus heavily on strategic competition, Pacific governments often prioritise economic development and climate resilience.
This difference in priorities has become one of the central challenges facing Western policy in the region.
PACIFIC GOVERNMENTS ARE SEEKING MORE ROOM TO MANOEUVRE
The Pacific Islands Forum has increasingly become an important platform for regional governments seeking to establish common positions.
Climate change remains one of the organisation's central priorities, but security and geopolitical developments are becoming increasingly prominent.
Pacific leaders have repeatedly emphasised that the region should not be treated simply as an arena for competition between larger powers.
For many island states, maintaining relationships with several partners offers a way to increase investment and diplomatic options without becoming dependent on any one country.
The emerging strategy is therefore one of diversification rather than alignment.
A CHINESE MISSILE TEST RAISED REGIONAL CONCERNS
Military developments are adding another dimension to the debate.
At the Pacific Islands Forum in September, regional leaders expressed concern over China's intercontinental ballistic missile test conducted in July.
The missile passed over parts of the Pacific, prompting discussion about transparency, notification procedures and the potential implications for Pacific states.
The issue demonstrated how decisions made by major military powers can have direct consequences for countries that are not themselves participants in those strategic rivalries.
It also highlighted a broader concern:
The Pacific is increasingly becoming part of the military geography of the Indo-Pacific.
AUSTRALIA STRENGTHENS ITS DEFENCE POSTURE
Australia has responded to the changing strategic environment by significantly increasing its focus on defence capability.
The country's most important strategic partnership remains its alliance with the United States.
The AUKUS agreement with the United Kingdom and United States is a central component of that strategy.
The programme is designed to provide Australia with nuclear-powered submarines while also expanding cooperation in advanced defence technologies.
Those technologies include artificial intelligence, autonomous systems, electronic warfare, quantum technologies and advanced undersea capabilities.
For Canberra, the objective is to ensure that Australia can operate alongside its allies in a region where military technology is developing rapidly.
AUKUS IS EXPANDING BEYOND SUBMARINES
The submarine programme receives most of the international attention, but AUKUS is also creating a broader technological partnership.
The three countries are developing advanced capabilities designed for future military operations.
Among them are autonomous underwater systems and technologies designed to operate in complex maritime environments.
That has particular significance for Oceania.
The Pacific contains some of the world's most important maritime spaces, while undersea cables and other infrastructure are increasingly essential to the global economy.
As a result, the ability to monitor and protect the seabed is becoming an important component of regional security.
UNDERSEA CABLES BECOME A STRATEGIC ASSET
Modern economies depend heavily on submarine communications cables.
They carry the overwhelming majority of international data traffic and connect isolated Pacific communities to the global digital economy.
Damage to these systems can cause serious disruptions.
That makes telecommunications infrastructure increasingly relevant to national security.
The issue is particularly important for Pacific Island states, where geographical isolation makes connectivity both more difficult and more important.
Investment in digital infrastructure therefore has two dimensions:
ECONOMIC DEVELOPMENT AND STRATEGIC SECURITY.
NEW ZEALAND FACES A MORE COMPLEX SECURITY ENVIRONMENT
New Zealand has traditionally maintained a strong diplomatic and security relationship with Australia while developing close connections with Pacific Island countries.
That role is becoming more complicated as major-power competition increases.
Wellington must balance its security relationship with Australia and the United States with its longstanding Pacific partnerships.
Climate change, economic development and regional sovereignty remain important elements of New Zealand's Pacific policy.
The country's challenge is to remain a credible regional partner without allowing the Pacific to become defined exclusively by strategic competition.
THE UNITED STATES IS REBUILDING ITS PACIFIC PRESENCE
Washington has increased its diplomatic engagement with Pacific Island countries as China's regional influence has grown.
The United States has reopened diplomatic missions, expanded development cooperation and strengthened security relationships with several Pacific states.
The strategy reflects a broader American effort to reinforce its position across the Indo-Pacific.
But Washington faces the same challenge as Australia and New Zealand.
Pacific governments want security cooperation, but they also want investment, infrastructure, climate assistance and economic opportunities.
Military strategy alone is therefore unlikely to determine the future of the region.
JAPAN AND INDIA ADD ANOTHER LAYER
Japan has maintained long-standing development and diplomatic relationships with Pacific Island countries.
Its involvement has expanded as Tokyo has strengthened its broader Indo-Pacific strategy.
India is also increasing its engagement with the region through its wider Indo-Pacific policy.
For both countries, the Pacific is connected to the security of maritime trade routes and the broader balance of power in Asia.
Their growing involvement means that the region is no longer defined exclusively by the competition between Washington and Beijing.
More actors are becoming involved.
THE GULF AND EUROPE ARE ALSO LOOKING TOWARDS THE PACIFIC
The strategic importance of the Pacific is attracting interest beyond the traditional regional powers.
European governments are increasing engagement with Pacific Island states, particularly through climate policy, development assistance and maritime cooperation.
Gulf countries are also expanding their international investment strategies, although their role in the Pacific remains smaller than their growing presence in Asia and Africa.
For Pacific governments, this wider interest creates more options.
It also creates a more complicated diplomatic environment.
CLIMATE CHANGE REMAINS THE REGION'S CENTRAL SECURITY ISSUE
While major powers focus on strategic competition, Pacific Island governments continue to place climate change at the centre of their international agenda.
For low-lying island states, rising sea levels and extreme weather can threaten infrastructure, food security, housing and economic activity.
Climate diplomacy has therefore become an essential part of Pacific foreign policy.
Regional governments increasingly expect major powers to demonstrate that their engagement will provide practical support for adaptation and resilience.
This has become one of the most important tests of external partnerships.
THE ECONOMIC VALUE OF THE PACIFIC
The region's importance is not limited to military strategy.
Pacific economies are connected to international fisheries, tourism, maritime trade, agriculture and natural resources.
Fisheries are particularly significant.
The Pacific contains some of the world's most productive fishing grounds, making management of marine resources an important economic and diplomatic issue.
For small island economies, access to international markets and sustainable management of natural resources can determine long-term economic stability.
PORTS AND INFRASTRUCTURE ARE BECOMING GEOPOLITICAL
Infrastructure has become one of the most closely watched areas of Pacific competition.
A port can facilitate trade.
A telecommunications network can connect an entire country.
An airport can transform tourism.
An energy project can reduce dependence on imported fuel.
But infrastructure can also have strategic implications.
Governments therefore increasingly examine not only the economic benefits of foreign investment, but also its potential security consequences.
This is particularly relevant when infrastructure is financed, constructed or operated by companies closely connected to major powers.
THE PACIFIC'S MARITIME POSITION MATTERS
The Pacific Ocean covers more than one-third of the Earth's surface.
Its enormous size makes control of maritime routes impossible for any single country.
But strategic access, surveillance and partnerships can influence how those routes are protected.
Australia's geographical position is particularly important.
The country sits between the Indian and Pacific oceans and is increasingly viewed as a key component of the Western strategic architecture in the Indo-Pacific.
Its military relationships with the United States, United Kingdom, Japan and other partners are therefore becoming increasingly significant.
THE REGION IS NOT CHOOSING SIDES
One of the most important characteristics of contemporary Pacific diplomacy is the reluctance of many governments to accept a binary choice between China and the West.
Pacific states have different political systems, economic interests and security concerns.
Some maintain diplomatic relations with Beijing.
Others recognise Taiwan.
Some cooperate closely with Australia and New Zealand.
Others seek greater economic engagement with China.
Many maintain relationships with multiple partners simultaneously.
This creates a region that is strategically important but politically diverse.
WHAT THE GREAT POWERS WANT
The major external actors have different objectives.
CHINA wants stronger diplomatic and economic relationships and greater influence in the Indo-Pacific.
THE UNITED STATES wants to maintain a favourable regional balance and prevent strategic dominance by a rival power.
AUSTRALIA wants a stable neighbourhood and stronger regional security partnerships.
NEW ZEALAND seeks regional stability while maintaining close Pacific relationships.
JAPAN wants an open and secure maritime environment.
INDIA is expanding its wider Indo-Pacific engagement.
Meanwhile, Pacific Island governments are attempting to ensure that these competing interests do not overwhelm their own priorities.
A REGION OF SMALL STATES WITH STRATEGIC WEIGHT
The Pacific Island countries may be small individually, but collectively they possess significant diplomatic and geographic importance.
Their votes matter in international organisations.
Their exclusive economic zones cover enormous maritime areas.
Their natural resources have economic value.
Their location matters to military planners.
And their cooperation can influence regional institutions.
This gives Pacific governments negotiating power that exceeds what their population size might suggest.
THE PACIFIC'S NEXT TEST
The central challenge will be maintaining regional stability while major-power competition continues to intensify.
If governments can manage the rivalry through diplomacy and practical cooperation, the Pacific could benefit from increased investment, infrastructure and connectivity.
If competition becomes primarily military, the region could face greater pressure and instability.
The choice will not be made by one capital.
It will emerge from decisions made across the Pacific.
FOSTER! ANALYSES
The Pacific is entering a period in which its strategic importance is increasing faster than its traditional political structures can adapt.
China's expanding presence, America's renewed engagement and Australia's growing defence capabilities are changing the regional balance.
AUKUS is strengthening Australia's military and technological position, while Pacific Island governments are using regional diplomacy to defend their own priorities.
Climate change, infrastructure and economic development remain just as important to the region as military security.
That is why the future of Oceania will not be determined simply by the outcome of the competition between China and the United States.
It will also depend on whether Pacific governments can use the attention of the world's major powers to strengthen their own economies, infrastructure and sovereignty.
The Pacific is gaining strategic importance.
But the countries that call it home are determined to ensure that their region does not become somebody else's battlefield.
The quiet rise of Oceania is therefore not only a story about great-power competition. It is a story about the Pacific demanding a greater role in deciding its own future.
FOSTER! NEWS
Clear facts. Real context.