Global Risk Analysis

Key Chapter Title List

1. World and U.S. Liquefaction Triggered by Changes in the Trump Status Quo
2. Global Economy: Simultaneous Expansion of State-Led Economies and Transformation of Financial Order
3. China's Actions Toward Expanding Core Interests: Rising Motivations and Opportunities
4. Europe's Strategic Balance in Flux Under U.S.-Russia Led Pressure for Ukraine Ceasefire and Peace
5. Intensifying Japan-U.S.-South Korea vs. China-Russia-North Korea Confrontation Centered on the Korean Peninsula
6. Chain-Reaction Cyber Crises Driven by Digital Concentration and Erosion of Trust
7. Dysfunction of U.S. Energy Hegemony and the Resurgence of Resource Geopolitics
8. Latin America in Turmoil Under Trump Administration's Western Hemisphere Return and Hardline Stance Against Drug Cartels
9. Escalating Risk of Final Israel-Iran Confrontation and Latent Concerns of an Arab Spring Revival
10. International Debut of Taliban Regime and the Rapidly Changing Eurasian Strategic Landscape

Document Introduction

This report is published by the PHP Institute's Global Risk Analysis Project, aiming to systematically identify and assess the most significant and urgent risks facing Japan and the world in 2026. The report posits that Donald Trump's return to power in December 2025 marks the world's entry into a period of intense turbulence characterized by changes to the status quo. This shift is not an isolated event but intertwines with intensifying great power competition, the reshaping of economic orders, and technological security risks, collectively constituting a "liquefied" world where established rules, alliances, and strategic balances face fundamental challenges.

The report's core analytical framework revolves around ten major risk areas. The primary risk stems from the disruptive adjustments in U.S. domestic and foreign policy. The Trump administration's transactional diplomacy and unilateralist policies will not only shake the transatlantic alliance but also force allies, including Japan, into a difficult rebalancing act between strategic autonomy and dependence. Secondly, the expansion of the state-led economic model and the geopoliticalization of the global financial order are evolving in tandem. The dominance of the U.S. dollar is being challenged, and the development of multipolar payment systems exacerbates market fragility and policy uncertainty. Thirdly, China's assertive posture on core interests, combined with the ambiguity of U.S. strategic commitments in the Trump era, injects a high degree of unpredictability and conflict risk into the security architecture of East Asia, particularly concerning the Taiwan Strait, the South China Sea, and the Korean Peninsula.

At the regional level, the report warns of multiple potential crisis flashpoints. Europe may be pressured by the U.S. into accepting a U.S.-Russia-led peace plan for Ukraine that may not align with its long-term interests, thereby damaging its strategic autonomy. The Middle East faces the grave risk of Israel and Iran moving toward a final confrontation, potentially triggering regional chain reactions. The Taliban regime's efforts to seek international recognition will reshape the geostrategic landscape of Central and South Asia. Furthermore, the concentration of digital technology and trust deficits will trigger chain-reaction cybersecurity crises, while changes in U.S. energy policy will reignite competition in resource geopolitics.

The report further points out that these risks are not isolated but interconnected and mutually reinforcing, collectively propelling the world into a complex phase termed the "Policene." Its characteristics include the concurrent occurrence of multiple crises, the diversification of actors, the failure of traditional governance mechanisms, and the nonlinear impacts of disruptive technologies like artificial intelligence. In this environment, traditional strategic models based on stable bipolar or unipolar structures may become ineffective. Decision-making by state and non-state actors is more susceptible to emotions, miscalculations, and short-term interests, significantly increasing the risk of situations spiraling out of control.

For Japan, this report emphasizes that in such a world of diminished situational awareness and reliance on inertia, Japan must undertake fundamental strategic adjustments. These include: within the framework of the Japan-U.S. alliance, both updating strategic integration to counter China's wedge strategies and enhancing autonomous defense capabilities and hedging strategies to address potential wavering in U.S. commitments; in the economic and financial spheres, actively participating in international rule-making, safeguarding the credibility of the yen, and addressing internal instability factors arising from entrenched fiscal burdens and changing market structures; at a broader strategic level, Japan must carefully position itself in a fragmented world, leveraging its unique status of having stakes in both the dollar and non-dollar spheres to become a key force in maintaining multilateral cooperation and stability. The ultimate purpose of this report is to provide decision-makers with the necessary insights and action frameworks for assessing and responding to future shocks by clarifying the interconnectedness of these critical risks.