A comprehensive analysis by Australia’s Lowy Institute reveals China is strengthening its position as a dependable regional partner during periods of global uncertainty, while United States policies are diminishing American influence across Asia. The findings come from the think tank’s 2025 Asia Power Index, a meticulous assessment tracking power distribution shifts across the continent through 131 indicators spanning economic capability, diplomatic relations, and cultural influence.
The annual index, which evaluated 27 nations and territories, maintained the United States in the top position for comprehensive power, with China securing second place and India ranking a distant third. Notably, the capability gap between the two superpowers has continued to narrow significantly. The report specifically highlighted how China has demonstrated remarkable resilience against US economic coercive measures, with Beijing effectively presenting itself as a staunch opponent of protectionism and unilateralism to regional partners.
Susannah Patton, project lead for the Asia Power Index, detailed at the Melbourne launch that multiple US policies have collectively undermined American standing. These include substantial tariff impositions on numerous countries, reductions in development assistance to the region, funding cuts to global media agencies, and restrictive travel and educational policies affecting Asian visitors.
East Asia senior fellow Richard McGregor emphasized that the index confirms China and the US have reached peer power status throughout Asia. China’s capacity to access diverse global markets beyond the United States has contributed substantially to its confident response to American tariff strategies.
The research also documented China’s impressive recovery in people exchanges and connectivity metrics, nearly returning to pre-pandemic levels after severe restrictions between 2020 and 2022. Recent visa-free travel arrangements with several Asian nations, including Indonesia, have accelerated tourism recovery and strengthened regional ties.
Australia ranked sixth in comprehensive power, though the report noted the nation faces challenges due to declining economic resources relative to other countries, requiring more strategic efforts to maintain regional influence. International relations expert Bec Strating observed that America’s diminishing regional standing presents both opportunities and concerns for Australia and other nations like Japan, New Zealand, and the Philippines regarding the stability of regional order frameworks.