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Australia, China, and the Indo-Pacific



April 23, 2018
Recent debate in Australia on regional strategic challenges has focused on China's rising influence, the
durability of the U. S.-Australian alliance, and how Australia should respond and position itself relative to
related changes in Indo-Pacific power dynamics. This debate is framed by increasing concern in Australia
about the influence of China and those who promote its interests, despite the fact that China remains a key
economic and trade partner. Australia's outlook is also affected by uncertainty about the Trump
Administration's transactional approach to the alliance with Australia and U.S. engagement with the
region.


Australia's China Debate

A 2017 Lowy Institute poll found that 77% of Australians view the alliance relationship with America as
important for Australia's security while 46% said that China is likely to become a military threat to
Australia in the next 20 years. The poll also found that 79% see China as more of an economic partner
than military threat. Of those polled, 60% felt that President Trump causes them to have an
unfavourable opinion of the United States.
For many years, Australian perceptions of China, particularly among business and political elites, have
been shaped by China's role as the leading destination for Australian exports. According to the Australian
Trade and Investment Commission, China is Australia's number one export market, our largest source of
international students, our most valuable tourism market, a maj or source of foreign direct investment and
our largest agricultural goods market. The China-Australia Free Trade Agreement entered into force in
2015.
The Australian Secret Intelligence Organization has pointed to the growing level of harmful espionage
and foreign interference operations being carried out in Australia that have sought to obtain sensitive
government and corporate information and to influence public debate. Prime Minister Turnbull introduced
a legislative overhaul of intelligence and espionage laws in December 2017. These espionage, foreign
interference, and foreign influence reforms would enhance existing espionage, secrecy, treason, sabotage,
and related offenses, and introduce new offenses targeting these areas.
China's activities in the South Pacific are raising concerns in Canberra. Reportedly, China and Vanuatu
have held discussions to establish a Chinese military presence in Vanuatu, a small island nation located


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