Media coverage of President Barack Obama’s high-profile visit to Australia and plan to boost US presence in Asia may mask America’s shrinking global footprint. The combination of concern over China and the US debt crisis could set Washington on a course to becoming a mere regional power in the Asia Pacific.

According to a just published report by the London-based International Institute of Strategic Studies, defense spending is rising in Asia – much of it driven by China, which accounts for 30 percent of the region’s military budget – and falling in Europe and US. The think tank attributes the trends to economic growth in Asia and what it calls strategic uncertainty. And that uncertainty has provided the US with a tempting opportunity to reassert itself in the region while cutting back elsewhere.

Last November, the Hawaiian-born Obama announced what his administration is calling a pivot towards Asia, representing a significant shift in policy since he took office. The change is driven by changing perceptions of Chinese power, but it’s also partly a result of diminishing US financial clout. Although Washington insists it will retain military superiority, the pivot could well mark the beginning of a geopolitical shift that ends up with the US being predominantly a regional power in the Asia-Pacific.

In the early days of his administration, Obama went out of his way to avoid offending China. On his first visit to the country, he took a lot of flak from political supporters as well as opponents and human rights groups for toning down criticism of China’s human-rights record. Then in July 2010, US Secretary of State Hillary Clinton challenged China’s territorial claims to the South China Sea, stating that the US had a national interest in freedom of navigation there and calling for a regional code of conduct, even though Beijing prefers to deal bilaterally with its neighbors in such territorial disputes. Chinese officials interpreted Clinton’s comments as hostile, and the Foreign Ministry in Beijing accused the US of virtually attacking China.

In November last year Clinton formalized the policy shift in in an essay for Foreign Policy, stating that the US would pivot towards Asia.

The administration has clearly decided going easy on Beijing was yielding no results and sees China’s growing military power in East Asia as a threat to US influence in the region, which went largely unchallenged since the end of the Korean War. Following Clinton's article was Obama’s visit to Australia and his announcement that 2,500 US Marines would be deployed to a new base near Darwin.

In terms of concentrating military and diplomatic effort where most needed to preserve US influence, this makes strategic sense for Washington. China is regarded as the only country likely to rival the US for military and economic power in the next few decades. Chinese defense spending is increasing by over 10 percent a year, and if the US wants to contain Beijing, it calculates that’s best done close to China’s borders and coasts. On top of this, two of the world’s potential flashpoints are on China's frontiers, the Korean Peninsula and the South China Sea.

But this new focus on Asia and promise to reinforce US military forces in the region are planned at the same time as growing debt mandates steep reductions in the Pentagon’s spending, equipment and manpower. Defense Secretary Leon Panetta has proposed reducing personnel by 100,000, cutting new spy planes and transport aircraft, and slowing spending on the new Joint Strike Fighter. So it seems inevitable the pivot will mean reduced military commitment in Europe and other parts of the world. The US is already planning to withdraw two combat brigades from Europe and trying to encourage its NATO allies to pick up the slack. The nascent Africa Command, Africom, could have its budget cut as well.

The navy, essential to the projection of US power globally, will fight to retain its current complement of 11 aircraft carriers, but success is by no means certain. The frontrunner for the Republican nomination for November’s presidential election, Mitt Romney, has made an issue of the navy’s size, arguing it is at its smallest since 1917 and promising to build 15 ships a year. However, many defense analysts argue his plan is unaffordable without deep cuts in the army and air force, given Republican demands to cut government spending. So far, the Romney campaign has not specified how his administration might pay for expansion of the navy.

Last year's intervention in Libya offered a glimpse of where US policy may be going. Initially, the Obama administration was markedly less enthusiastic than Britain and France. The Europeans took the lead in front-line action, although the Americans were essential for destroying Libyan air defenses and the supply of precision munitions. In Libya, this was dubbed “leading from behind,” but it illustrated how Washington wants to pass responsibility for the defense of Europe and western influence in neighboring regions, such as North Africa, to the Europeans.

Despite the Libya intervention, the call for shifting responsibility seems to be falling on deaf ears at the moment as Europeans cut their defense spending and confront their own economic crisis by reducing their budget deficits.

In the US, too, the Pentagon cuts have been presented as a necessity to help reduce the huge budget deficit, and there is no guarantee cuts in overall defense spending will be temporary. If Washington fails to bring down its deficit substantially in the next few years, future presidents may have to cut defense spending further.

The plan to focus on East Asia could still be derailed, of course. When asked what was most likely to blow his government off course, the late British Prime Minister Harold Macmillan replied, “Events, my dear boy, events.” In the case of the US pivot, the most likely event – a known unknown in the Rumsfeldian sense – is a conflict in the Middle East where the US commitment to Israel could lead to American military forces being used against Iran to try to stop Tehran developing nuclear weapons.

In explaining the pivot to the Asia-Pacific in a speech to the Australian parliament last November, Obama said the US was winding down its military commitments in Iraq, after US combat troops left in late 2011, and Afghanistan, from which the US plans to have withdrawn all but trainers and advisers within the next two years, to focus further east. But even if Obama ends up sending forces into action again next door in Iran, that would most likely delay, rather than derail, the shift in focus to the Asia-Pacific, given the strategic consensus in Washington that China is its main challenger.

The Obama administration insists the US will maintain its worldwide military reach. However, while no American leader is likely to take the political risk of declaring that the US is no longer a global power, Washington could well be on a course to becoming a de facto regional power in the Asia-Pacific simply because it cannot afford to contain a growing China and maintain a global military presence.

(Alistair Burnett is the editor of The World Tonight, a BBC News program. This is reprinted with permission of the Yale Center for the Study of Globalization.)