Military competition, alliances, and flashpoints in a contested global order
Great‑power rivalry and security
Renewed Great-Power Competition and Strategic Flashpoints in a Contested Global Order
As global tensions intensify in 2026, the landscape is marked by a resurgence of great-power rivalry, driven by strategic competition among the United States, China, and Russia. This renewed rivalry manifests across military, technological, and regional domains, shaping a complex and often volatile international environment.
U.S. Strategy Toward China and Russia
The United States remains committed to countering the influence of China and Russia through a multifaceted approach emphasizing military readiness, technological superiority, and diplomatic engagement. Central to this strategy is strengthening alliances such as NATO, which has recently adopted a new strategic concept aimed at confronting emerging threats in cyberspace, space, and regional flashpoints. The U.S. has increased defense spending, with recent reports indicating a sustained rise in military budgets to modernize forces and enhance deterrence capabilities.
In tandem, the U.S. is exploring policies to bolster its technological edge, particularly in artificial intelligence (AI) and semiconductor hardware. The possibility of loosening export controls on advanced chips—considered a move to maintain competitiveness—risks shifting the balance in the AI hardware race, where companies like Nvidia are experiencing record revenues indicative of the sector's strategic importance.
NATO’s Evolving Role
NATO’s new strategic concept reflects a recognition of shifting threats, especially in the Arctic, Indo-Pacific, and cyberspace. The alliance aims to adapt to a world where great-power competition extends into space and cyber domains, with increased military exercises, infrastructure investments, and diplomatic coordination. The alliance's focus on resilience and deterrence underscores the growing importance of collective security in an era of heightened regional flashpoints.
Defence Spending Trends
Global defense expenditures continue to trend upward amid geopolitical uncertainty. Countries are investing heavily in military modernization, Arctic patrol capabilities, and strategic infrastructure—particularly in regions like the South China Sea, Taiwan Strait, and the Arctic—where competition over resources and security is most intense.
Key Flashpoints and Regions
The Arctic: From Climate Change Catalyst to Militarized Frontier
The Arctic remains a critical theater of strategic competition. Accelerated climate change has opened new shipping lanes like the Northern Sea Route and Northwest Passage, reducing transit times and increasing economic prospects. However, this environmental transformation has also intensified militarization and territorial disputes:
- Russia has significantly expanded its military infrastructure, establishing new bases and conducting patrols to assert sovereignty over resource-rich territories.
- China has deployed icebreakers and established research stations, integrating Arctic routes into its Belt and Road Initiative to secure access to natural resources.
- Western nations such as Norway, Canada, and Denmark are investing in maritime capabilities to defend their claims amid overlapping interests and environmental risks.
The militarization race raises concerns about miscalculations and regional stability, especially as environmental concerns intersect with strategic ambitions.
Taiwan and the South China Sea
Tensions in the Taiwan Strait have escalated, with increased military exercises and diplomatic pressures from China. Countries like the Philippines are signaling military coordination with Taiwan, reflecting a broader regional contest over influence and security. The U.S. continues to bolster its Indo-Pacific presence through bases and alliances, aiming to deter Chinese assertiveness.
The Indo-Pacific and Chagos Islands
Strategic locations such as Diego Garcia in the Chagos Islands serve as pivotal hubs in Indo-Pacific power projection. The expansion of great-power rivalry in this region underscores the importance of control over maritime routes and military access.
Russia-Ukraine War and Nuclear and Space Competition
The ongoing Russia-Ukraine conflict has reshaped global security dynamics, prompting increased defense spending worldwide. The war has also heightened concerns over nuclear proliferation and space militarization, as nations seek to secure their strategic assets beyond traditional domains. Military activity around space assets—such as satellites used for surveillance and communication—has become a new frontier in deterrence and escalation risks.
The Technological Frontier: AI, Critical Minerals, and Hardware
The race for technological superiority remains central to great-power competition:
- The AI race is marked by ethical debates, espionage, and hardware dominance. Investigations reveal Chinese entities engaging in industrial-scale theft of proprietary AI models, challenging the integrity of the global innovation ecosystem.
- Private sector firms like Nvidia are leading in semiconductor hardware, essential for AI capabilities. Nvidia’s record earnings highlight the strategic importance of hardware in maintaining technological edge.
- The U.S. is considering relaxing export controls on advanced chips, risking a shift in the global supply chain and competitive balance.
Simultaneously, control over critical minerals—such as rare earth elements, lithium, and cobalt—is vital. The U.S. launched Project Vault, a $12 billion initiative to develop domestic mineral reserves, aiming to reduce reliance on foreign sources like China. Countries are also investing in recycling and regional processing hubs to bolster supply chain resilience.
Diplomatic Shifts and Alliances
Diplomatic moves reflect a nuanced landscape:
- Europe, exemplified by Friedrich Merz's meeting with Xi Jinping, is seeking economic ties with China despite geopolitical tensions, potentially balancing against U.S. influence.
- The EU and Canada have jointly opposed U.S. tariffs, signaling a push for regional resilience and trade cooperation.
- The expansion of BRICS to include nations like Argentina, Egypt, and Indonesia indicates efforts to forge alternative development pathways and counterbalance Western influence.
Conclusion
As 2026 unfolds, the convergence of military posturing, resource competition, and technological rivalry signals a pivotal moment in the global order. The Arctic’s militarization, regional flashpoints like Taiwan, and the race for AI and critical minerals will shape international stability for decades to come. Strategic decisions—whether towards increased competition or cooperation—will determine the future landscape, with risks of escalation balanced against opportunities for new alliances and governance frameworks. The world stands at a crossroads, where the choices made today will influence global peace, security, and prosperity in the years ahead.