The March exercise modelled steady and crisis-driven growth, highlighting the Southwest Pacific, Indian Ocean and Australia's northern and western maritime approaches.
It found Beijing likely to expand access through security cooperation, infrastructure, port visits, logistics hubs and rotational deployments, while increasing naval, coast guard, survey and intelligence activity below clear red lines.
The report says China is pursuing gradual, legally framed grey-zone competition rather than sudden breakthroughs, aiming to normalise a persistent regional presence that complicates US allies' planning and could shift the strategic balance.
As China's 'grey-zone' tactics expand, can traditional military alliances counter this advance without sparking a major conflict?
With its navy now the world's largest, is China's silent expansion making America's 'denial defense' strategy obsolete?
Will Indo-Pacific nations choose Beijing's economic promises over long-standing security ties with the West?
Navigating China's Maritime Grey-Zone Tactics: Regional Flashpoints and Alliance Counterstrategies
Overview
The March 2026 ASPI war game revealed China's deliberate 'slow-roll' strategy to expand its influence in the Indo-Pacific by gradually increasing its military and paramilitary presence through layered maritime forces and dual-use port networks. This approach avoids provoking a unified response from regional allies while steadily raising risks of maritime incidents and diplomatic friction. China’s incremental activities normalize its presence, reducing regional alarm. In response, countries like Australia are enhancing maritime domain awareness, hardening critical infrastructure, and strengthening alliances, especially with Japan, to deter coercion. Taiwan remains the most volatile flashpoint, with strong defenses likely leading to prolonged conflict if escalation occurs.