The strategic outlook for 2026 offers little respite from volatility, as zones of stability contract and contested regions expand — from the Arctic to the high seas, and from cyberspace to space itself. As we approach the new year, geostrategic and geoeconomic rivalry pervades every domain and sector, shaping information systems, infrastructure and even humanitarian relief.

The long-term shift to a more anarchic world order is accelerating. This transition has been driven by successive administrations in the United States who have chosen to reduce foreign engagement, while illiberal powers have sought to reshape an order they see as unrepresentative of their interests. But the policies of the Trump administration have now given it added momentum.

This emerging global order is often described as multipolar, yet that framing is arguably premature. The U.S. still has the military and economic weight to shape outcomes more than any other state by acting or by abstaining. Its restraint or involvement — such as in Gaza, Iran and Ukraine in 2025 — show that doing less can be as decisive as doing more. American power may be declining in relative terms, but so far the material change is why, when and where it exercises it.

What is emerging instead is a multisphere world: not a stable constellation of poles, but a fluid order defined by overlapping and often competing interests, dependencies and contestation. States, China above all, are not so much dismantling as repurposing multilateral institutions to advance narrower agendas and create narratives to justify wielding power coercively. Spheres of influence are forming without fixed boundaries or shared norms to contain them.

As commitments to uphold the rules of the liberal order erode, the balance of power between states becomes the main determinant of peace and order. Institutions that once mitigated the risks of conflict are atrophying, and trust is yielding to improvisation and self-interest. While multilateral diplomacy, aid and international cooperation are in retreat, political, economic and security systems are straining beyond their limits — and global power is decisively shifting towards militarization. Global defense spending reached a record $2.7 trillion in 2024, which is about 13 times total development aid. Investing in war fighting capabilities eclipses investments in stability and development, which is a global trend that shows no sign of reversing any time soon.

In a militarized balance-of-power world, assessing strategic intent matters as much as capability. What states aim to achieve and what they want others to believe rarely align. This ambiguity lies at the heart of both coercion and deterrence, particularly for China. Concealed intent and deception can confer the military advantage of surprise. Misunderstood intent can also restrain conflict or invite it. As deterrence gives way to deception and dialogue to signaling, the risk of miscalculation rises, particularly as crisis-communication channels narrow, which is increasingly the case with China and the U.S.

Assessing how either side in the U.S.-China competition will act under different conditions requires an understanding that each is pursuing quite distinct ambitions in their grand strategy. China’s is long-term, ideological and systemic: Beijing aims to build a Sinocentric order less reliant on U.S. security guarantees........

© The Japan Times