arms smuggling, sea piracy, natural resource theft, and separatism. Terrorism issues intensified in the last three decades due to various factors including economic issues and radicalism. A very dynamic development of the Asia-Pacific region will impact on economic and security issues. The development needs to be observed and affects the security and stability is China’s economy and military policies, strategic policy of the United States (US) in the region, and South China Sea disputes. Chinese economic growth enables the country to modernize its military. This condition makes speculation and varied responses coming from countries in the region and it also creates worry about the military balance, thus, it can be a security dilemma for countries in the region. The US rebalancing policy in the Asia Pacific region reached through three initiatives, namely: security through the presence of military power, economy through the Trans Pacific Partnership (TPP) to make a balance of the Regional Comprehensive Economic Partnership (RCEP) as well as diplomacy engagement. South China Sea disputes involving several countries may affect the stability of security in the Asia Pacific region. This region has a very strategic geographic position and a high economic value of natural resources. The existence of the United States and China in the South China Sea issue should not affect security conditions, but it can increase economic growth, prosperity, stability, and peace in the region. 7