Key Takeaways

• Regional powers are catching up to US military capacity in the Indo-Pacific, eroding its former unrivaled position.
  
• Washington lags behind China on economic relationships and diplomatic influence.

The most recent military rankings for Asia released by the Lowy Institute note a significant rise in China’s position, narrowing the gap with the United States, and reflecting the shifting geopolitics of the region. The boost is largely down to China’s expanding economic and diplomatic ties in Asia, as well as the modernization and growth of the People’s Liberation Army (PLA). Russia, while maintaining its second-place ranking, has seen a sharp decline in military power amid the ongoing Ukraine war, which has drained Moscow’s resources and weakened its presence in Asia. India has also climbed the ranks, surpassing Japan as the fourth most powerful nation globally, and third in Asia. However, India’s ability to project power far from its shores remains limited. While China has greater reach than India, Beijing still lacks a network of overseas military bases, and the PLA Navy is not yet a blue-water force capable of projecting power far from home. On the other hand, the most likely flashpoint for a US-China conflict is Taiwan, a theater where China’s military capabilities are at their strongest.

Breaking down the rankings

The Lowy Institute Asia Power Index ranks the relative strength of 27 countries and territories across the region, from Pakistan to Russia, and as far into the Pacific as Australia, New Zealand, and the United States. In doing so it focuses on 131 indicators across eight key areas: military capability, defense networks, economic capability, economic relationships, diplomatic influence, cultural influence, resilience, and future resources.

The Global Fire Power (GFP) Index, a separate ranking system, similarly places the United States first, Russia second, China third, and India fourth globally. Unlike the Lowy Index, which considers broader factors like diplomatic and cultural influence, GFP focuses primarily on specifically military considerations such as manpower, airpower, land forces, naval forces, economics, logistics, and military budgets. Based on these metrics, the U.S. remains far ahead of China, with a GDP of about 50% larger and a military budget more than three times greater: $916 billion for the U.S. to China’s $296 billion. However, some analysts argue that due to purchasing power parity—where money stretches further in China than in the United States—the gap between the two countries’ defense spending may not be as large as the nominal dollar figures suggest. The U.S. boasts over 13,000 aircraft compared to China’s 3,000, and 11 in-service aircraft carriers, while China has three: the Liaoning, Shandong, and Fujian.

Russia currently leads in nuclear capability, with 1,549 deployed strategic warheads and an additional 1-2,000 non-strategic warheads. The United States is close behind with 1,419 deployed strategic warheads and a total stockpile of 3,748 warheads. China, lagging in numbers, has around 500 nuclear weapons, 310 of which are assigned to strategic launchers. However, Beijing is rapidly expanding its arsenal and could reach 1,000 warheads by 2030. While Russia and the United States still dominate in overall numbers, China’s nuclear capabilities are growing fast.

There are important qualitative differences when delving into the rankings. For example, at first glance, China and the United States appear nearly equal in some areas, like submarines—China has 61, just three fewer than the United States. However, the U.S. has a much larger fleet of nuclear-powered submarines, which can stay submerged longer and operate farther from home, while China relies more on less-capable diesel-electric subs with shorter ranges. Simply comparing numbers doesn’t reflect overall military power. That’s why the Lowy Index is more comprehensive, taking into account factors like alliances and diplomatic power on top of military assets.

Diplomatic dimensions of military power

Overall, the United States remains a dominant force in Asia and the world, with power trending upward, though still below its 2018 peak. It leads in six of eight categories, including future resources, resilience, defense networks, cultural influence, economic strength, and military power. It’s not a clean sweep, however, as China surpasses the United States in economic relationships and diplomatic influence. On the latter, the U.S. fell to third place behind Japan due to its commitments elsewhere in the world and less concentrated diplomatic efforts in Asia.

The United States generally avoids joining multinational trade agreements and groupings, while China leads initiatives like the Belt and Road Initiative (BRI), BRICS, and the Shanghai Cooperation Organization (SCO). This involvement boosts China’s economic and diplomatic influence according to the Lowy Index, but whether this translates into an advantage in a potential war is debatable. The United States is part of NATO, AUKUS, and the Quad, and has bilateral defense agreements with numerous nations, whereas China’s only formal defense agreement is with North Korea. The most powerful country aligned with China in a hypothetical conflict with the United States is Russia.

China and Russia’s growing defense cooperation has strengthened both nations’ military capabilities. China supports Russia’s defense industry, helping sustain its war in Ukraine, while Russia’s arms sales have bolstered China’s air, naval, and missile capabilities. Despite increased joint military exercises, the two countries still lack full interoperability and do not have a formal mutual defense agreement. This partnership complicates US defense strategy as it tries to manage threats in both the Indo-Pacific and Europe. The U.S. is also tied up with supporting Ukraine and is involved in conflicts in the Middle East. Yet conversely, Russia’s own commitments amid the Ukraine war limit its ability to aid China significantly in a hypothetical war with the United States. While China’s potential alliances remain uncertain, Washington’s capacity to handle a near-peer conflict alongside its global commitments is also in question.

India passes Japan in the rankings

In 2024, India surpassed Japan to become the third-most powerful country in Asia, with a 2.8-point increase in its overall score. Its greatest strength is in future resources, ranking just behind the United States and China, while its weakest area is economic relationships, partly due to limited participation in regional integration. Despite improvements in resilience, diplomatic influence, and military capability, India’s regional influence remains below expectations, as shown by its widening negative power gap. Although India has made gains, its performance in defense networks and economic relationships has declined, slipping to 9th and 10th places respectively.

In comparing India and Japan’s military power, India has a significant advantage in manpower, with an active military about six times the size of Japan’s Self-Defense Forces. Including paramilitary forces adds approximately 2.5 million more troops to India’s total. India’s defense budget is about 50% larger than Japan’s, and although Japan has a larger GDP, it carries far more external debt, which could complicate war financing. India also outmatches Japan in aircraft, tanks, and has about 90% more naval vessels, though Japan’s merchant fleet is three times larger. Another key difference is that India possesses an estimated 172 nuclear warheads, while Japan has none.

Japan’s strengths lie in diplomatic influence, where it ranked 2nd, surpassing the United States, and in defense networks, with a 13.1-point boost due to increased cooperation with the U.S. and regional allies such as Australia, the United Kingdom, India, France, the Philippines, and Vietnam. However, its weakest areas are resilience and future resources, where it ranks 7th. While Japan has made modest gains in military capability, it still lags behind India, whose growing military strength and regional influence have solidified its position as a formidable power.

China’s rise in military strength and diplomatic reach, coupled with Russia’s ongoing involvement in Ukraine, is forcing the United States and its allies to rethink strategies in both the Indo-Pacific and Europe. While China’s power has seemingly plateaued below the United States, it remains a dominant force in Asia. Russia, on the other hand, is losing relevance in the region as the Ukraine war drains its resources. India, now the third-most powerful country in Asia, has growing potential but still falls short of fully capitalizing on its resources. Japan, while surpassed by India in terms of military power, remains a top economic power and is evolving into an active player in defense and security diplomacy.