PRIF-Report No. 99 The Roo and the Dragon Australia‘s foreign policy towards China during the Rudd era Niklas Schörnig This report was prepared with the kind support of the German Research Foundation (DFG). Peace Research Institute Frankfurt (PRIF) 2010 Correspondence to: PRIF Baseler Straße 27-31 60329 Frankfurt am Main Germany Telephone: +49(0)69 95 91 04-0 Fax: +49(0)69 55 84 81 E-Mail:
[email protected] Internet: www.prif.org ISBN: 978-3-942532-15-0 Euro 10.- Summary Living in the neighborhood of Asia’s giants has always been a challenge for western- oriented Australia. The rise of China, however, which is not only likely to lead to tremendous power shifts between the U.S. and China but most probably will also lead to a full-fledged power transition, is a formidable challenge for Australia. On the positive side, Beijing has become Australia’s number one trading partner over the last few years, when it comes to both exports as well as imports. Thanks to China’s ever growing demand for Australia’s raw materials and resources, Australia got off lightly during the economic crisis which hit many Western countries severely in 2008 and 2009. On the negative side, however, China’s economic rise is mirrored by a significant increase in the country’s military might. Beijing is investing heavily in military capabilities and has changed spending priorities from land-based forces to the air force and navy, a clear indication of power-projection ambitions. Many foreign policy experts – not only Australian ones – share the strong feeling that a naval clash between China and America in the South-East Pacific is the most likely scenario involving open military conflict between the two powers.