Australia and its China agenda: balancing contestation and engagement

This article appeared in The Pacific Review. https://doi.org/10.1080/09512748.2026.2672990

ABSTRACT

Despite escalating strategic tensions, Australia continues to pursue qualified cooperation with China. Even as the effects of recent Chinese trade measures persist and geopolitical competition intensifies, Canberra maintains a dual-track strategy: contesting Beijing’s actions in security and governance domains while sustaining cooperation in areas of mutual benefit. This article addresses two core questions: why does Australia continue to engage with an increasingly assertive China, and how is this managed in practice? Focusing on developments from 2017 to 2025, the analysis integrates system-level and unit-level perspectives to explain Australia’s evolving strategy. System-level dynamics, including China’s rise, intensifying US-China rivalry and the erosion of a stable Indo-Pacific order, have driven closer alignment with the US and like-minded partners through initiatives such as AUKUS and the Quad, as well as expanded engagement in Southeast Asia and the South Pacific. At the unit-level, domestic economic interdependence, political incentives, public opinion and the role of Chinese-Australian communities have moderated calls for confrontation, sustaining cooperation in trade, diplomacy and transnational security, as well as sub-national and multilateral engagement. Together these dynamics underscore a model of coopetition in which deterrence and engagement coexist.
 

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