Australia is caught between two poles: the United States, its indispensable ally, and China, on which its economy overwhelmingly depends. As the strategic rivalry between the United States and China grows, Australia’s position between them becomes even more delicate. Inevitably, Australia’s foreign policy debate has now become focused around the question of how to manage and balance these two critical relationships.
Alas, Australia’s leaders have not handled the discussion gracefully. Both the current progressive government and the conservative opposition, which might well win the upcoming federal election on September 7, simply deny that there is a choice to be made. On one level, they are correct. Australia does not face an all-or-nothing choice right now. On another level, though, no one has ever seriously argued that it does, nor that it should make a choice if that can possibly be avoided. In fact, most everyone in Australia wants both relationships to flourish, so that the United States can keep Australians safe while China makes them rich.
But the fact of the matter is that Australia will be increasingly unable to compartmentalize its relationships with the United States and China. It used to be able to do so -- witness the fact that Australia has managed to make China its biggest trading parent while maintaining and even enhancing its alliance with the United States. But that is getting harder. The reason: both the United States and China now see their political and strategic relationship with Australia primarily in terms of their own rivalry. The result: Australia can strive for good ties with both, but will have to realize that each will be watching to make sure that the other doesn’t get the upper hand.
The first signs of this change came as early as 1996, when Beijing leaned hard on Canberra over its support for U.S. aircraft carrier deployments around Taiwan. Beijing froze ministerial contact, troublesome for a Canberra that was eager to build trade. Canberra got the message.