Flint advises international businesses and investors on policy, politics, regulation and competition.
Flint advises international businesses and investors on policy, politics, regulation and competition.
Quick links
Sectors
Follow Us
Although US and EU policy often sets the tone and parameters for global regulatory and policy debate, treating APAC as either distinct or a passive rule-taker is a miscalculation. The APAC region is characterised by its own unique dynamics across geopolitics, the push-and-pull of regional alignment, and domestic politics, policy and regulation. Success in the region depends on carefully navigating and interacting with governments in this context.
The US has traditionally been a major influence in APAC – which has in recent years been focused on competition with China. But the Trump administration is more inward-looking, with less focus on regional economic engagement. The administration’s tariff-first approach has left parts of APAC reeling, with a sense that unpredictable trade outcomes threaten supply chains and undermine long-held assumptions among APAC trading partners and allies. Similarly, cuts to development spending will be felt – especially in developing Southeast Asia and the Pacific, both of which are important swing regions as the US competes with China. Anxiety about security guarantees in Europe has now carried over to APAC, where has a patchwork of overlapping security arrangements, many underpinned by US support.
For insight on which economies and sectors face the greatest exposure to US tariff policy, see: Which countries and sectors are most exposed to Trump’s tariffs?
The US’s foreign policy under Trump is driving other regional shifts. China and India have edged closer, partly in response to tariff shocks. India Prime Minister Modi, whose government is grappling with the US imposition of 50% tariffs on goods imported from India, made his first trip to China in seven years to meet Chinese President Xi Jinping at the SCO Summit. Across Southeast Asia, governments are recalibrating their balancing act. On one hand, some governments have sought to deepen ties with China on issues such as digital and supply chain connectivity through the recently negotiated CAFTA 3.0. At the same time, ASEAN members are pushing ahead with talks on regional digital standards through DEFA—from cross-border data and e-commerce to AI governance and cybersecurity—while still exploring ways to reinforce security links with the US and its partners. In response, the US is conditioning tariff relief on countries, taking a tougher stance on Chinese circumvention, and in some cases such as Japan, on greater openness to US investment.
For deeper context on how AI governance is becoming a tool of geopolitical competition, read: AI beyond the Global North, a new battleground for influence
Geopolitics is shaping regulation, and it is increasingly visible in sectors such as technology and financial services.
For APAC, these pressures land most squarely on the digital economy. Exposures to global supply and tech dependencies have pushed governments such as India and Korea to accelerate efforts to localise computing, data, and AI infrastructure. At the same time, debates about the supply of rare earths for semiconductors, which are vital for the digital economy, continue in the background, with ‘digital sovereignty’ increasingly framed as much by national resilience and geopolitical positioning, as by innovation.
Related reading: what “sovereign AI” really means for governments and firms in the region - Sovereign AI in APAC - what it means for business
Financial services regulation is also increasingly shaped by geopolitics. The US is taking a lighter-touch approach to regulation of digital assets, presenting a competitive challenge to other jurisdictions, including global financial centres such as Singapore and Hong Kong. Tied to this are questions of monetary sovereignty, cross-border influence and capital flows. Meanwhile, governments in emerging and developing economies are encouraging greater private capital investment in infrastructure and financial markets to channel domestic savings toward sustainable long-term growth, while aiming to reduce reliance on foreign lenders and mitigate risks from volatile external capital flows.
The outlook for domestic politics across the region is also generally more volatile, with election cycles, shifting policy priorities and external pressures creating sharper swings in regulatory outcomes. In APAC, election cycles in markets like Korea and India can quickly alter national priorities, reshaping the policy and regulatory outlook for tech, finance, and industry. Governments are increasingly juggling competing imperatives — growth versus climate commitments, financial inclusion versus capital controls, and digital freedom versus social cohesion — with trade-offs that directly affect investors through policies and regulations that impact operations and compliance costs, such as online safety and social media rules.
Increased spending, attention, and sensitivity in the defence sector add yet another layer. The US is pressing allies to increase defence spending, emphasising military modernisation and readiness, which in turn is shaping investment and capital flows. Australia’s critical minerals strategy, Singapore’s semiconductor push, and Taiwan’s AI surveillance debates show how domestic security concerns shape regulation in ways that spill into markets.
APAC’s regulatory environment is not a diluted or lagging version of European or US policymaking; it is a distinct arena in which sovereignty, development goals and competition unfold, shaping outcomes and rules as much as growth and opportunity. Firms that thrive will be those that stop waiting for convergence and instead build agility and Asian business capability into their systems, not only in terms of operations and strategy but reading and engaging with local stakeholders also. It is by navigating the nuances, rather than just ticking boxes, that global businesses can turn regulatory complexity from a cost into a competitive edge.