With some of the world’s largest economies, most vital sea lanes, and closest U.S. allies, the Asia-Pacific Region is quickly becoming centrally important to today’s international system. It is also home to the first new great power of the twenty-first century: the People’s Republic of China. Managing China’s rise will not be easy. In recent years, Beijing has been modernizing its military forces, acting more assertively, and raising the risk of escalation, especially with respect to territorial disputes throughout its near seas. This report outlines the key elements of a U.S. defense strategy for the region—one that is based on the enduring grand strategy of global leadership and engagement, but also recognizes the challenges posed by China’s growing military power.