How Smaller States and Middle Powers Navigate the US–China Rivalry to Protect Autonomy and Extract Benefits: An Expanded Perspective

As the geopolitical contest between the United States and China deepens, smaller states and middle powers are increasingly active players shaping a fragmented and multi-layered global order. Their strategies—ranging from hedging and balancing to pursuing strategic autonomy—are vital in managing risks, seizing emerging opportunities, and safeguarding sovereignty amid the intensifying superpower rivalry. Recent developments across maritime, digital, resource, technological, and regional domains underscore their adaptive efforts to stay resilient and influential in this high-stakes environment.

The Evolving Landscape of US–China Competition

The rivalry has profoundly altered how middle and smaller nations approach security, economic policies, and diplomatic engagement. The US seeks to maintain technological and military primacy, employing measures like sanctions, alliances, and technological leadership initiatives. Conversely, China deploys a combination of infrastructure investments, resource diplomacy, and gray-zone tactics—subtle coercive measures designed to expand influence without triggering open conflict.

This environment compels these nations to pursue selective alignment, diversification, and autonomy to avoid over-reliance on either superpower and to maximize their strategic leverage.

Key Domains of Influence and Strategy

Maritime and Undersea Domains: Chokepoints, Coercion, and Undersea Competition

Strategic maritime corridors such as the South China Sea, Hormuz, and Bab el-Mandeb remain flashpoints. Recent incidents exemplify China’s use of gray-zone tactics, including maritime militia activities and covert operations, to assert territorial claims and test responses. For example:

• Japan recently seized a Chinese fishing trawler, signaling active maritime enforcement.
• Maritime militia operations have increased, often involving ambiguous vessels that challenge international norms.

In the South China Sea, high-stakes undersea activities—such as undersea drone deployments and submarine patrols—are becoming more clandestine, escalating risks of miscalculation. A recent YouTube documentary, "The Secret Submarine Game," highlighted these underwater standoffs, emphasizing their potential to spark unintended escalation.

Digital Infrastructure and Cyber Resilience

Control over undersea cables and digital infrastructure has emerged as a crucial battleground. China’s investments in projects like the PEACE cable aim to dominate cyber connectivity and influence data flows. Meanwhile, regional powers are responding by:

• Investing in resilient digital infrastructure
• Enhancing cyber defense capabilities

These efforts are essential to mitigate vulnerabilities and maintain sovereignty over critical digital assets.

Resource and Energy Diplomacy: Minerals and Energy as Strategic Tools

The contest over critical minerals—such as lithium, cobalt, and rare earth elements—has intensified. China’s extensive investments in African mineral sectors serve dual purposes: securing supply chains and expanding regional influence. Conversely, the US is actively building strategic mineral reserves and supporting local industries to diversify sources.

Energy diplomacy also features prominently. The 20-year LNG agreement between Saudi Arabia and US-based Caturus exemplifies how energy dependencies are leveraged strategically. Additionally, Pakistan’s mineral partnerships are attracting great-power investments, positioning the country as a new arena for resource-based competition.

Technological and Military Industrial Policy

The technological arms race persists:

• US emphasizes hypersonic weapons, AI ethics, and quantum computing.
• China pursues state-led efforts to dominate AI, autonomous systems, and advanced missile technology, exemplified by breakthroughs like the CJ-1000 scramjet.

Europe is also striving to develop autonomous defense capabilities, including cyber tools and drones, despite internal disagreements and reliance on US security frameworks.

Defense Modernization and Self-Reliance

Countries such as Japan, Australia, and India are investing heavily in self-reliant defense industries:

• Japan’s F-X fighter project and naval enhancements aim to bolster sovereignty.
• Australia’s submarine upgrades and cyber capabilities reflect regional security ambitions.
• India continues defense modernization through indigenous tech development and naval expansion, aiming to reduce reliance on external powers while asserting regional leadership. Its active role in the Quad exemplifies efforts to maintain strategic flexibility amid rising tensions.

Regional and Global Implications: Expanding Arenas of Competition

Indo-Pacific and U.S. Pacific Territories

Tensions in the Indo-Pacific have increased concerns over U.S. territories like Guam and Hawaii. A recent policy analysis titled "What do Rising Tensions in Indo-Pacific Mean for U.S. Pacific Territories?" highlights:

• Enhanced military deployments
• Surveillance and infrastructure investments
• Deterrence efforts aimed at Chinese assertiveness

While intended to prevent escalation, these measures risk provoking unintended conflict.

Europe’s Strategic Engagement in the Indo-Pacific and Taiwan Strait

Europe’s role in the Taiwan Strait is gaining prominence. As discussed in "Europe’s Strategic Moment in the Taiwan Strait," EU nations are grappling with deterrence, legitimacy, and peace politics. Despite internal disagreements, many EU countries recognize the importance of regional stability and are pursuing independent defense capabilities, balancing their traditional alliance with the US and developing regional partnerships.

Latin America and the US–China Resource Race

A significant new development is the US–China competition in Latin America, particularly over resource-rich nations. A recent article, "U.S. Wants China Out of Latin America. Is that Even Possible?", explores the complex dynamics:

• China’s investments in Latin American infrastructure and mining—aiming to secure access to minerals and energy resources—are expanding influence.
• The US seeks to counterbalance through diplomatic, economic, and military means, supporting regional stability and alternative supply chains.

This contest over Latin America underscores the globalized nature of middle-power strategies, which now extend beyond Eurasia into the Americas.

Pakistan’s Mineral Resources as a New Arena

Pakistan’s rare earths and energy mineral reserves have become key strategic assets. As highlighted in "Pakistan's Minerals: The New Arena of Great-Power Competition," Chinese investments aim to secure supply chains, while the US and allies push for alternative sources, fostering a regional competition that impacts security dynamics and aligns Pakistan as a pivotal strategic pivot point.

Strategic Guidance for Smaller and Middle Powers

To effectively navigate this labyrinth, these nations should consider:

• Diversifying critical supply chains, especially in rare earths, digital infrastructure, and energy sources.
• Investing in resilience, including cybersecurity, undersea infrastructure, and technological innovation.
• Engaging in selective decoupling to protect vulnerable sectors while maintaining economic stability.
• Strengthening regional and multilateral alliances, fostering norms that promote stability and prevent escalation.

Current Status and Broader Implications

The geopolitical landscape remains highly fluid. Middle and smaller powers are not passive; instead, they are actively shaping the emerging order through strategic diversification, resilience, and regional cooperation. Their efforts contribute to regional stability and strategic leverage, but the risks of miscalculation—particularly in maritime and technological domains—persist.

The question remains whether these states can adapt, coordinate, and maintain autonomy without provoking conflict. Success could lead toward a more resilient, balanced, and cooperative international system, whereas failure risks deepening fragmentation and confrontation.

Final Reflection

In an era defined by fierce great-power rivalry, smaller and middle powers are emerging as key architects of the future global order. Their strategies—focused on resilience, diversification, and regional engagement—are crucial for fostering a more stable and equitable international environment. Their ability to manage risks, fortify alliances, and pursue sovereignty amidst competing superpowers will shape whether the world moves toward cooperative multilateralism or slides further into fragmentation and conflict.

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In summary, the expanding scope of US–China competition—from Eurasia to Latin America—underscores the importance of strategic resilience and diversification for middle and smaller powers. Their proactive efforts in maritime security, digital resilience, resource diplomacy, and regional cooperation are shaping a more complex, multi-polar world, where autonomy is both a goal and a necessity for navigating the turbulent currents of global rivalry.