From Hedging to Balancing: Australia’s China Policy and Implications for US-China Rivalry

Abstract

For more than a decade, Australia was able to find a balanced position between China–its largest economic partner–and the United States–its core security ally. Before the outbreak of the COVID-19 global pandemic, Canberra hedged its economic and security bets between China and the United States rather successfully, with Australian top policymakers announcing that the country would not have to choose between the two great powers and that there are ways to maintain a tight alliance with the US while enhancing friendship and cooperation with China. Such a foreign policy stance, while not without problems, contributed to the mitigation of US-China rivalry in the Asia-Pacific. However, Australia-China relations started to gradually deteriorate starting from 2016, with Canberra giving up on hedging after the COVID-19 pandemic by signing the AUKUS (Australia-UK-US) security pact that has been widely received as an effort to contain China. This chapter explores this shift in Australia’s foreign policy, paying attention to how it affects the US-China rivalry. It conceptualises the shift as a transition from hedging to anti-China balancing and demonstrates how Australia’s role has evolved from mitigating to exacerbating that rivalry as an outcome.