Indo-Pacific nations are racing to adapt to a world in which the United States has become fundamentally unpredictable. The 2026 Oksenberg Conference, hosted by the Shorenstein Asia-Pacific Research Center (APARC), gathered scholars and foreign service veterans at Stanford University to assess how regional stakeholders are confronting what Canada's Prime Minister Mark Carney had famously named "a rupture, not a transition" in the post-World War II order. The conference took place as Carney was in the midst of an Indo-Pacific trip, visiting Australia, India, and Japan to forge "middle power" trade alliances, and as the United States joined Israel in a war against Iran.

“For Indo-Pacific countries, the question is no longer just how to balance between Washington and Beijing,” said APARC Director Kiyoteru Tsutsui in his welcome remarks, “but how to understand and respond to the emergence of a multipolar world in which the United States is less predictable, less committed to multilateral frameworks, less invested in alliance maintenance, and more willing to pursue narrowly defined national interests at the expense of broader international stability.”

The panelists agreed that, while the U.S. retreat from the eight-decade-old international order it had previously championed creates multiple opportunities for China, Beijing is not naturally filling the vacuum, and regional powers are not pivoting toward it but instead scrambling to diversify security and economic partnerships. The consensus is that the international system is moving toward multipolarity and the world toward an increasingly unstable period, and no one knows yet what will replace the disintegrating post-WWII order.

Sign up for APARC newsletters to receive our event invitations and highlights > 

China Sees Opportunity in Multipolarity

To commemorate the legacy of the late Michel Oksenberg, a renowned scholar of contemporary China and a pioneer of U.S.-Asia engagement, the Oksenberg Conference, an annual tradition sponsored by APARC and led by the center’s China Program, gathers individuals who have advanced U.S.-Asia dialogue to examine pressing issues affecting China, U.S.-China relations, and broader U.S. Asia policy.

At this year’s convening, the first panel, moderated by Shorenstein APARC Fellow Thomas Fingar, focused on how China perceives, interprets, and responds to the new vulnerabilities and opportunities in the international system.

Speaking via video link from Beijing, Da Wei, a professor in the Department of International Relations at Tsinghua University and the director of its Center for International Security and Strategy, said China views the current moment as neither ideal nor catastrophic but better than recent alternatives.

China has experienced three scenarios, Da explained. First, from the 1990s through the Obama era, China benefited greatly from the U.S.-led liberal order, but was increasingly criticized by the West. Second, during Trump's first term and the Biden administration, while facing mounting pressure of decoupling in a bipolar system, China was forced into a camp with Russia, which Da characterized as Beijing’s “worst scenario.” Now, under Trump's second term, the shift toward multipolarity has redirected pressure away from China and onto multilateral institutions and U.S. allies – "the least bad option" from Beijing’s perspective.

Da argued that “culturally, China has a very low appetite for global governance or leadership.” China sees itself primarily as a regional power, he said. Rather than filling the vacuum left by the U.S. withdrawal from international institutions, "we want to be powerful and respected in the region. I don't think China has a very big appetite for leadership in faraway regions, except for economic interests." He contrasted this “Emperor's perspective,” demonstrated by China’s foreign policy, with the U.S. “boss perspective.”

Susan Shirk, a research professor at the University of California, San Diego’s School of Global Policy and Strategy and director emeritus of its 21st Century China Center, noted that China's response to Trump's trade war has been robust, muscular, but disciplined. "The Xi Jinping administration was operating in a more disciplined manner than it had previously," she said, contrasting this approach with what she called Xi's "rash reactions” to Japan and failure to engage Taiwan diplomatically.

Shirk stated that, while Trump's alienation of U.S. allies through extreme tariffs and military interventions has created clear opportunities for China to expand its influence and further divide Washington from Europe and Asian partners, Beijing has only modestly exploited these openings.

She emphasized that Xi's support for Russia in its war against Ukraine represents "self-defeating overreach" that undermines China's ability to improve relations with Europe. "Russia represents an existential threat to Europe," she said. "Xi Jinping really doesn't grasp how important this is."

Mark Lambert, a recently retired U.S. State Department official who served as China coordinator and deputy assistant secretary in the Bureau of East Asia and Pacific Affairs, contrasted the Biden administration's China strategy with the current U.S. policy vacuum.

The Biden approach, he explained, was rooted in U.S. relations with five Asian treaty allies plus NATO and positioned China as the only country with the means and capabilities to reshape the post-World War II order. It required "all hands on deck" to address this challenge through what U.S. officials called a "lattice work of relations": the Quad involving India, AUKUS with Australia, the Camp David summit between South Korea and Japan, and strengthened linkages between NATO allies and East Asian partners. China's support for Russia's invasion of Ukraine unified Europeans in understanding the China challenge in ways never seen before. The administration also successfully reframed Taiwan's importance, emphasizing that Taiwan's chip dominance was vital to global prosperity.

Today, Lambert argued, the United States either has no China strategy or “one so classified that neither our allies nor our practitioners know what it is.” On security, trade, technology, and international cooperation, the United States has given China “fantastic opportunities,” he noted.

Allies’ Transactional Coping Strategies

The second panel, moderated by Laura Stone, a retired U.S. ambassador and APARC's inaugural China Policy Fellow, turned to other regional states – South Korea, Japan, Russia, and India – and how they read the geopolitical landscape and devise strategies to shape the regional order.

Victor Cha, the D.S. Song-KF Chair and professor of government at Georgetown University and president of the Geopolitics and Foreign Policy Department at the Center for Strategic and International Studies (CSIS), noted that "every U.S. ally around the world is looking at a Plan B," pointing out that, in the first year of the second Trump administration, allies were not acting on these plans, but that "we’re now at a threshold where many of them are executing their Plan B's."

Cha identified seven types of behavior that U.S. partners have adopted when dealing with the Trump administration. These are drawn from a recent CSIS project on ally and partner responses to the paradigm shift in U.S. foreign policy. First is prioritizing face-to-face meetings with Trump himself, "because there's a recognition that the policy process in the United States is broken,” Cha said, “and that policy making is not being informed, as it traditionally has been, by foreign policy professionals. It's all happening at the leader level."

Other strategies include minimizing risk to avoid what Cha called "the Zelensky moment" – the public humiliation Ukraine's president suffered in the Oval Office in February 2025 – and preparing "trophy deliverables," such as South Korea's promise to buy Boeing airplanes and Japan's commitment to purchase Ford trucks.

“The America First policies have effectively put the custodial burden of maintaining the alliance on the partner,” Cha said. “Whether it's Japan, Korea, Taiwan, the Philippines, or whoever it might be, the burden traditionally has been on the United States, but now it's on the partner. They're the ones who have to try to maintain this relationship. So it's about minimizing risk.” 

South Korea's recent summit with Trump yielded a $350 billion investment package, yet soon after, U.S. immigration authorities raided a Hyundai facility, and Trump threatened 25% tariffs on Korea.

"Why take all this abuse?" Cha asked. His answer: South Korea and Japan see no alternative to the United States on security, and they secured previous concessions in areas such as nuclear submarines, ship building, and enrichment and reprocessing of spent nuclear fuel, which they do not want to renegotiate. 

One positive outcome, Cha pointed out, has been the unexpectedly warm bilateral relationship between Japan and Korea. Despite having leaders who would normally clash – a far-right conservative in Japan and a progressive in South Korea – the uncertain geopolitical environment has brought the two countries together.

He predicted China would eventually use economic coercion against South Korea over the U.S.-Korea nuclear submarine agreement, just as it did during the 2016-17 THAAD dispute and is currently doing to Japan. "It's not happening now because I don't think China wants bad relations with Japan and Korea at the same time, but it's coming," he said, adding that this development will likely push South Korea closer to the United States and Japan.

Japan Reconsiders Alliance Dependence as Its "Too Big to Fail" Status Proves No Shield

Katherine Monahan, a 2025-26 visiting scholar and Japan Program Fellow at APARC and a foreign service officer with the U.S. Department of State, said Japan's relationship with the United States is "too big to fail," but that has not prevented serious strain between the two allies.

Having served in Tokyo as deputy chief of mission at the U.S. Embassy in Japan until April 2025, Monahan shared that, when Trump's Liberation Day tariffs hit Japan with a 25% rate, the Japanese could not believe that was the figure next to their name, while other allies were at 20% and 15%. They wondered, “Don't we have any special relationship at all?”

Monahan called attention to a recent Foreign Affairs article by Masataka Okano, Japan's former national security advisor, in which he argues that Japan needs to take strategic autonomy more seriously. When made by a former Japanese official, such a statement represents a significant shift in the nation’s mindset, she said. 

Japan is also reconsidering previously used language around "de-risking" from China in favor of diversifying trade with multiple partners, including China, Canada, and Europe. This shift is happening on the backdrop of the current war with Iran, as 90% of Japanese oil comes through the Strait of Hormuz. “Japan has to start balancing sources and supply chains,” Monahan argued.

Russia Exploits American Unreliability

Russia expert Kathryn Stoner, the Satre Family Senior Fellow at Stanford’s Freeman Spogli Institute for International Studies, said America’s unpredictability under Trump represents pure opportunity for Vladimir Putin.

"Putin knows Trump. He gets him," Stoner said. "They have a not-completely dissimilar worldview." Trump's red carpet welcome for Putin at last year's Alaska summit, despite the Russian leader's indictment by the International Criminal Court for war crimes, sent a powerful message, Stoner asserted. So did Trump's lack of concern for democratic values and his criticism of U.S. allies.

She reminded the audience that Putin has been in power for 26 years and has watched multiple U.S. presidents come and go, adapting successfully to each. Putin wants multipolarity, she said, and Trump’s actions have emboldened him. Putin’s goal is to “reclaim Imperial Russia as a global power and restore what he views as its proper sphere of influence,” extending through Ukraine and Belarus into Poland, up to German borders in the west and to the south, through Moldova, Serbia and Bulgaria, to the Black Sea in the east, all the way to the Kamchatka Peninsula. 

According to Stoner, the Russia-China relationship is significantly more durable than many believe. The relationship between the two powers extends beyond oil sales to investment, defense coordination, and sophisticated military exercises. “It kind of doesn't matter whether there's love lost or not. There's an opportunity to be gained on both sides."

"Russia's economy is actually not on the verge of collapse," Stoner added. "It has completely retooled toward the military."

India Feels Betrayed

Emily Tallo, a postdoctoral fellow at Stanford’s Center for International Security and Cooperation, who studies how political elites structure foreign policy debates in democratic countries, especially in India, explained that New Delhi felt especially betrayed by Trump's foreign policy pivot.

The first Trump administration had centered India as a key partner against China. In May 2025, however, when an India-Pakistan conflict flared up, Trump claimed credit for brokering peace, but India took issue with his threat of trade measures to bring an end to the conflict. He then hosted Pakistan's army chief at the White House and signed deals with Islamabad. "This was a twist of the knife for India," Tallo said.

Trump also imposed 50% tariffs on India, including a penalty for buying Russian crude oil, which was not applied to China, and backed out of a QUAD summit in New Delhi.

India now views China as its primary security threat, and the recent India-Pakistan crisis, in which China supplied all of Pakistan's weapon systems and possibly intelligence, made New Delhi’s two-front threat fears a reality. "India is really sensitive to any hints of U.S. retreat in the Indo-Pacific, and any acceptance of Chinese Hegemony in the region," according to Tallo.

She concluded that, like other regional powers, India is committed to preserving the U.S. partnership but is diversifying and seeking a “Plan B.” It finalized free trade agreements with the European Union and the United Kingdom, agreed to purchase French Dassault Rafale jets, and conducted a pragmatic reset with China, citing U.S. unreliability as cover to stabilize a difficult bilateral relationship.

“India wants to be a regional power aligned with but not allied with the United States [...] They want to be considered as the United States’ main partner in Asia and a major counterbalance to China.”

This essay was first published by Seoul National University's Institute for Future Strategy. You can also view the Korean version.

Technological hegemony surrounding artificial intelligence (AI) has emerged as a central facet of national economies and security. Global competition among countries and corporations to secure high-level talent has intensified into a matter of survival. Worldwide demand for AI talent now exceeds supply by more than threefold. In Silicon Valley, AI dominates the discussion, and competition among big tech firms to attract talent is escalating. Ultimately, the rivalry between the United States and China will be decided not only by capital or technology but by who succeeds in attracting and retaining global talent.

In South Korea, concerns over talent outflows from Korea are growing. Last year, Korea ranked fourth among the 38 OECD countries in terms of AI talent outflow. Compared to other advanced economies, Korea’s AI industrial ecosystem remains underdeveloped, while overseas firms offer better compensation and research environments. The recent phenomenon of 56 Seoul National University professors relocating abroad over the past four years, a “new brain drain,” must be understood in this broader structural context.

This reality is also clearly reflected in the Global Talent Competitiveness Index, published annually by INSEAD. Korea ranked 31st this year, a position disproportionately low relative to its economic standing, and fell seven places compared to two years ago. In particular, Korea performed poorly in attracting and retaining talent, ranking 55th and 37th, respectively. These findings suggest that, beyond economic incentives, social, cultural, and environmental factors play a decisive role in talent mobility.

Korea’s talent outflow is especially alarming because it coincides with record-low fertility rates and rapid population aging. Before this convergence hardens into irreversible decline, Korea must establish a Ministry of Human Resources to oversee a comprehensive national talent strategy and devise systemic measures for talent development, attraction, and utilization.
 

Talent Portfolio Theory
 

In a recent book published by Stanford University Press, The Four Talent Giants, I proposed a framework titled “talent portfolio theory.” Just as financial investment strategies adopt a portfolio approach, national talent strategies should also be portfolio-based, emphasizing diversification to minimize risk and continuous adjustment (rebalancing). In other words, just as financial portfolios are composed of cash, stocks, real estate, and bonds, talent portfolios consist of four elements—the “4B's”: brain train, brain gain, brain circulation, and brain linkage.

Moreover, just as investors design different portfolios, each country’s talent portfolio varies depending on its economic needs as well as cultural and institutional contexts. Japan, Australia, China, and India (all discussed in the book) include all four B's but have constructed distinct portfolios that contributed to their respective economic development. A portfolio approach transcends the traditional binary of “brain drain versus brain gain” and offers a more comprehensive and flexible framework for understanding national talent strategy, one that is particularly relevant for Korea.

First, “brain train” refers to developing domestic human resources through education and training. It is a fundamental element of any portfolio. In Japan’s portfolio in particular, homegrown talent accounts for a large share. Japan has favored domestically educated and trained talent over foreign or overseas-trained individuals, making them the backbone of its economic development.

By contrast, Australia places greater emphasis on “brain gain.” Brain gain involves importing foreign labor, and approximately 30 percent of Australia’s workforce is foreign-born. Until the 1970s, Australia upheld the “White Australia” policy, but a major shift toward multiculturalism subsequently elevated brain gain to a central position in its portfolio. Brain gain pathways include the study-to-work route, where international students remain for employment, and the work-to-migration route, where individuals enter on work visas and later settle. Australia has effectively utilized both pathways.

“Brain circulation” involves bringing back nationals who were educated or employed abroad, and it has been critical to China’s portfolio. Following China’s opening in the 1980s, Chinese nationals came to represent the largest share of participants in the global talent market, including international students. Approximately 80 percent of them returned to China after the 2000s. Known as haigui (sea turtles), these returnees played prominent roles in China’s science, technology, education, and economy, supported by numerous central and local government programs designed to promote talent circulation.

“Brain linkage” refers to those who do not return home after studying or working abroad but instead serve as bridges between their host countries and their homeland. By leveraging their local networks, social capital, they support their home country from abroad, making this a key component of India’s portfolio. India refers to them as a “brain bank” or “brain deposit,” exemplified by leaders of Silicon Valley big tech firms such as Google CEO Sundar Pichai.

However, all talent portfolios carry inherent risks. When adjustment is delayed or fails, risks can escalate into crises with negative effects on the broader economy. The experiences of the four countries illustrate this point.

Japan has faced two major risks. A talent strategy centered on domestic talent weakened its global competitiveness, while demographic decline reduced its labor pool. Although Japan actively attracted foreign students to increase brain gain, its exclusive social and cultural environment limited their integration into the workforce after graduation. While there are many reasons behind Japan’s “lost 30 years” since the 1990s, one factor was its failure to adjust a portfolio overly concentrated on domestic talent in a timely manner.

Australia has confronted rising anti-immigration sentiment and tensions with China. Public concern grew over excessive immigration and perceived threats to national identity, prompting the government to tighten immigration policies. Amid conflict with China, Australia diversified its foreign talent sources from China to India and Southeast Asia. The pandemic, which restricted cross-border mobility, dealt a severe blow to Australia’s talent attraction efforts.

In China’s case, despite aggressive brain circulation policies, top-tier global talent has remained hesitant to return, as relinquishing careers built abroad is not easy. China accordingly shifted its focus toward brain linkage for these elite individuals. At the same time, brain circulation and linkage strategies became a source of friction with the United States, and rising anti-immigration and anti-China sentiment in the U.S. and Europe reduced opportunities for study and employment abroad. Recently, China has adjusted its portfolio to strengthen domestic talent development.

India, despite its strong brain linkage, remains vulnerable to brain drain. However, as economic opportunities expand domestically, return migration has increased, gradually reshaping its portfolio composition.
 

What Should Korea’s Talent Portfolio Strategy Be?

What, then, about Korea? Let us examine Korea’s situation by comparing it with the four countries through the lens of talent portfolio theory.

Brain train: Human resources have been critical to Korea’s economic development, with the government playing a central role. Key examples include preferential policies for technical and commercial high schools during the 1970s under the Park Chung Hee administration to support industrialization, and efforts to internationalize universities in the 1990s as part of globalization. While less dominant than in Japan, brain train has constituted a significant share of Korea’s talent portfolio.

Brain gain: Korea has imported low- and semi-skilled labor from China and Southeast Asia to fill so-called 3D jobs, but attraction of global high-level talent has remained limited. As in Japan, social exclusivity and cultural barriers continue to impede integration.

Brain circulation: Comparable to China, brain circulation has played a vital role in Korea’s economic development. Overseas education and experience have carried strong premiums, and China explicitly benchmarked Korea and Taiwan when designing its own policies.

Brain linkage: Compared to brain circulation, brain linkage has, until recently, occupied a relatively small share of Korea’s portfolio.

Facing the AI era, low fertility, and the crisis of a new brain drain, what strategy should Korea pursue in the global competition for talent? As noted above, rather than fragmented and ad hoc measures, Korea must comprehensively review and continuously adjust its talent strategy through a portfolio approach.

Brain train: Korea must cultivate talent for future industries, particularly in science and engineering. Training should be aligned with AI-related fields to better match university output with corporate demand. The excessive concentration of top students in medical schools must be corrected. Support mechanisms to retain domestic talent should be strengthened. A recent Bank of Korea survey of 1,916 science and engineering master’s and doctoral degree holders working domestically found that 42.9 percent of science and engineering master’s and doctoral graduates are considering overseas employment within three years—an alarming signal. While brain train will remain vital, its relative share is likely to decline.

Brain gain: As demographic crises intensify and the share of brain train diminishes, the necessity and importance of brain gain will grow. In particular, Korea must actively utilize the more than 300,000 foreign students currently in the country as human and social capital. At present, universities focus merely on filling enrollment quotas, and most foreign students either leave Korea immediately after graduation or remain employed only briefly. This, too, constitutes a form of brain drain. To increase the share of brain gain in the portfolio, foreign students must be managed holistically from selection to graduation and employment. While immigration is ultimately inevitable, it must be approached cautiously and deliberately, considering its impact on the domestic labor market and anti-immigration sentiment. Australia’s successful experience offers useful lessons.

Brain circulation: Although it occupies a relatively modest share of Korea’s portfolio, a certain level should be maintained. With declining numbers of students studying abroad and reduced inclination among overseas Koreans to return, care must be taken to prevent a sharp drop in this component. Otherwise, Korea risks losing global competitiveness, as Japan’s experience warns.

Brain linkage: Alongside brain gain, brain linkage is crucial to Korea’s portfolio adjustment. Key target groups include departing domestic talent (the new brain drain), foreign students, and the diaspora. Although their likelihood of reemployment in Korea is low, their potential for exchange and collaboration with Korea remains open. Like India, Korea should foster and support brain linkage by treating them as a “brain bank” or “brain deposit.”
 

Toward the Establishment of a Ministry of Human Resources

At the national level, a control tower is needed to design an optimal talent portfolio and make timely adjustments. Korea should establish a Ministry of Human Resources by consolidating functions currently dispersed across the Ministry of Education (universities and graduate schools), the Ministry of Science and ICT (R&D), and the Ministry of Employment and Labor (foreign employment support). It is worth recalling that Singapore, ranked first globally in talent competitiveness, established its Ministry of Manpower early on. Expanded and reorganized from the Ministry of Labor in 1998, it played a pivotal role in transforming Singapore into a talent powerhouse. Through education and development investments, Singapore strengthened domestic talent competitiveness while opening its doors to multinational talent, and it also implemented policies to promote talent circulation and linkage. From the perspective of talent portfolio theory, Singapore represents a successful case of diversification and continuous adjustment. In the increasingly fierce global competition for talent in the AI era, nations and firms that fall behind cannot secure their future. Korea is no exception.