Australia's Foreign Policy with the U.S. and China

Australia foreign policy debate has begun to take focus on two of the largest economies: The United States, a century long ally, and China a major trading partner. As China’s economy continues to grow and its need for natural resources increases, Australia will need to find a way to manage and balance its relationship between the two rival countries.

The history and money between the United States and Australia is deeply rooted. The U.S. is one of the largest investors in Australia and has been a military ally and partner for almost a century. This relationship is not stopping China from developing relationships with Australia, who they see as a major supplier of natural resources. Recently, Chinese companies have begun to invest in Australian companies. In February, the Chinese company Citic Resources Holdings bought a major stake in the Australian company Alumina.

In the second quarter of 2013, 35.4% of all Australian exports went to China, which is double the level of five years ago. As Australia begins to become more exposed to China, it may have to choose one economy over the other. The Australian economy leans on the United States to keep them safe, but they can flourish a relationship with China that can make them rich. A recent controversy between these two critical relationships occurred when the U.S. increased its military presence in Australia’s Northern Territory. Beijing quickly stated to the Australian government that they saw the move as a threat towards China.

In the September Australian elections, foreign policy was not the main focus. Voters have installed a conservative government under Tony Abbott, who has spoken about the importance of Australia’s relationship with the United States. Regardless, China has a grip hold on the Australian economy and could threaten it if Australia adopts policies against Chinese interest.

The Australian government walks a fine line between its relationship with the United States and China. As much as Australia wants the rivalry between the U.S. and China to be settled, it would be very unexpected for an Australian politician to speak out on.