By Bec Strating Director, La Trobe Asia

For 70 years of Australia’s independent foreign policy making the country’s economic and security interests were rarely viewed as incompatible.  Its long tradition of foreign policy ‘pragmatism’ held that Canberra could engage simultaneously with great powers, particularly the United States and China. As recently as 2020, political leaders argued that Australia would not have to ‘pick sides’.  

The intensification of strategic competition between the US and China, however, has heralded the return of great power politics and with it, some core realist assumptions about how we should view the world and our region. China is increasingly being viewed as a key national security threat to Australia and its sovereignty, and the pragmatic tradition of engagement - balancing security and economic priorities – has come under challenge. 

Yet, realism - a theory that views world politics as an enduring contest for power among self-interested states – does not necessarily provide all the right tools for understanding how Australia does and should engage with a diverse region such as Asia. 

According to realist thinking, great power competition inevitably forces a middle-sized power such as Australia to make a choice between its security ally and its biggest trade partner. The problem with such thinking, however, is that it sets up a false binary between security and economics. In reality, economics and national security are inseparable.

On a very fundamental level, the health of the economy is crucial for funding defence. Otherwise, how else will we pay for nuclear powered submarines? For a maritime trading nation like Australia, maintaining open trading routes at sea is also a fundamental security issue, especially given our reliance on key exports for defence, such as fuel.

States are also able to use economic instruments to pursue national security objectives, including through deepening relationships with other partners and advancing their abilities to wield political influence.  While think pieces proclaim that the world is bifurcating into blocs, many Asian countries reject the idea that choices must be made either between security and economics, or the great powers. 

Realism tends to suggest that in the contest between security and economic interests, security wins. The need to protect sovereignty is the ultimate calculation. China’s rise highlights the tension between security and economics, as Australia’s biggest trading partner became perceived as its biggest threat. In dealing with this tension (and a Chinese government keen to punish Australia through economic sanctions during COVID-19), the Morrison government prioritised security. In 2021, the AUKUS agreement between in Australia, the United States and the United Kingdom consigned the mantra of ‘not choosing sides’ to the dustbin of history.  

Despite this, China remains Australia’s biggest trading partner. Since the federal election in 2022, Albanese government has sought to balance economic and security interests with China through a détente of sort, a ‘stabilisation’ of the bilateral relationship and a rollback of various tariffs. Opponents of the Albanese government’s efforts to re-engage have presented these efforts at a revived pragmatism as a compromise to Australia’s sovereignty – often with little evidence. 

Beyond big powers 

Realism also tends to suggest that great powers are the only states that matter. As a middle-sized country, it is true that managing great powers is a central preoccupation of foreign policy in Australia. This kind of thinking was on full display when former Prime Minister Paul Keating argued in March last year that “foreign policy is what you do with the great powers”, accusing Foreign Minister Penny Wong of focusing too much attention on smaller regional states.

But it is not just big powers that matter. 

There is a tendency for the concept of ‘Asian engagement’ – another stalwart concept in Australian foreign policy - to become conflated with ‘China engagement’. 

China-centric views of Asia sacrifice the importance of middle, smaller and regional powers to Australia’s security and prosperity and flattens out the immense diversity of the region. 

Apart from China, Australia’s next biggest export partners are Korea, Japan and India, countries which face similar dilemmas of needing to balance significant trading relations with China amidst growing concerns about Beijing’s regional intentions. This shared reality provides opportunities for Australia to work together with other regional states in finding ways to reduce dependence and shore up economic resilience.   

The realist belief in the inevitability of conflict also overwhelming dominates Australia’s discussion and thinking about the region, especially concerns about what we might do in the result of a ‘Taiwan contingency’. Such inevitability forecloses on thinking about other options of statecraft, such as what actions might possibly de-escalate tensions or defuse crises if they arise. In Australia, we rarely seem to consider Taiwan for its own sake even though it is a top 10 trading partner. There is much more to do in Australia to understand Taiwan and Taiwanese perspectives on security. 

Finally, realism suggests that China pursues an Asian ‘sphere of influence’, contrary to Australia’s national interests. Efforts to engage economically with smaller and middle powers, such as through the recent Southeast Asia Economic Strategy to 2040, are necessary steps if Australia wishes to shape a regional security order that is not dominated by one state.

Professor Bec Strating is Director of La Trobe Asia and Professor of International Relations at La Trobe University.  Her book ‘Girt By Sea: reimagining Australian Security’ co-written with Professor Joanne Wallis was recently published by La Trobe University Press. 

Contribute to the conversation on social media using #AsiaAgenda or send us an email at [email protected]