Debate over China’s role in Australia’s security has become polarised, with critics retreating to a familiar refrain: China is our largest trading partner, so any security concerns are exaggerated. That argument is not just incomplete; it is strategically unserious.
Yes, China is our largest trading partner. But it is also a security threat. These two things can both be true, and thinking otherwise leaves us vulnerable.
In the Australian television series Utopia, Defence officials are called in to explain the threat environment but go to elaborate lengths to avoid naming China. The conversation becomes increasingly circular until they land on the need to protect Australia’s shipping routes to China – protect them from China. The humour works. Australian policy discourse often avoids acknowledging risk when it sits alongside economic dependence.
China, by contrast, often uses blunt language on sovereignty and coercion. In July 2021, Chinese President Xi Jinping warned that foreign forces attempting to bully China would ‘get their heads bashed.’ In July 2022, during a call with Joe Biden over Taiwan, Xi said ‘those who play with fire will perish by it.’ In June 2024, Defence Minister Dong Jun said that ‘anyone who dares to separate Taiwan from China will only end up in self-destruction.’ These statements reflect how Beijing signals resolve.
China is a state pursuing its interests with growing capability and confidence. What matters is behaviour. Over the past decade, Beijing has demonstrated a willingness to use a full spectrum of tools, including economic punishment.
Between 2020 and 2023, China imposed restrictions on Australian exports, including barley and wine, following political disagreements. These were targeted measures against politically salient sectors. Economic pressure and political signalling were aligned.
That’s coercion, not commerce.
This behaviour sits within a broader pattern. China is engaged in territorial and maritime disputes across its periphery: in the South China Sea with Vietnam, the Philippines, Malaysia and Brunei; in the East China Sea with Japan; and along its land borders with India and Bhutan. The significance lies not in the disputes themselves, but in how they are pursued – through sustained pressure, incremental change and the integration of legal, economic and military tools.
Trade behaviour follows the same logic. China has imposed restrictions not only on Australia but also on countries such as Lithuania and South Korea in response to political decisions it opposed. Economic relationships are leveraged to shape policy outcomes.
Military capability reinforces this behaviour. Australia’s 2023 Defence Strategic Review described China’s build-up as the largest and most ambitious since World War II. China now fields the world’s largest navy by ship numbers and continues to expand long-range strike capabilities.
Operational behaviour adds further weight. Unsafe interactions between Chinese and Australian armed forces increase risk. Cyber operations extend this pressure below the threshold of conflict, eroding security without triggering traditional responses.
For some, this analysis will be dismissed as China hawkishness. For others, it’ll be seen as clinging to a unipolar world that is already fading. Both arguments miss the point. Serious strategy requires nuance and clarity. China is not inherently bad, but its behaviour and political system should not be romanticised. The task isn’t making a moral judgement but rather understanding how power is exercised and what that means for Australia’s interests.
Some respond with whataboutism, pointing to the behaviour of the United States and others, as if that resolves the question. It doesn’t. Australia operates in a region where proximity, exposure and dependence determine risk.
China can be Australia’s largest trading partner and still present a strategic risk, just as the US can be Australia’s closest security ally while at times acting as an economic competitor. These are not contradictions. They are the normal conditions of international relations. Mature strategy requires holding both truths at once.
False equivalence obscures more than it reveals. Strategy requires a clear-eyed assessment of capability, behaviour and proximity.
This is not simply a China problem; it’s a concentration risk problem. When critical economic exposure is heavily weighted toward a single partner, vulnerability follows, particularly when that partner has already demonstrated a willingness to apply pressure.
The lesson extends beyond China. If the Iran conflict and associated volatility in global liquid fuel supply demonstrate anything, it’s that geographic and geopolitical concentration creates systemic risk. Supply chains that appear efficient in steady-state conditions can become acute vulnerabilities under stress. Blind reliance on markets to correct disruption in real time is not a strategy. The same logic applies to Australia’s concentrated economic exposure to China.
Dependence isn’t a shield; it’s a source of vulnerability. When one partner has already shown it will weaponise asymmetry, the relationship carries risk.
Australia can and should trade with China. But trade doesn’t neutralise strategic competition.
China doesn’t seek war with Australia. War would devastate regional prosperity, including China’s own interests. But strategic competition is not defined solely by war. It is defined by the ability to shape choices and impose costs. That dynamic is already visible.
Economic interdependence doesn’t eliminate the risk of coercion. Trade can coexist with pressure. Prosperity can sit alongside vulnerability. Australia must ensure that no external actor, regardless of economic importance, can dictate its choices.
Economic interdependence does not eliminate the risk of coercion. Trade can coexist with pressure. Prosperity can sit alongside vulnerability.
Australia needs to reject the false binary between economic engagement and strategic clarity. It’s possible – and necessary – to do both.
Power transitions are reshaping the international system. Australia’s task remains constant: assess the environment based on interests. An order defined by transparency, open markets and freedom of navigation serves Australia well. An order shaped by coercive leverage doesn’t.
The policy question is whether Australia is prepared for a reality in which economic, military and political tools are used in combination to influence its decisions.
That requires deliberate policy that includes diversifying trade exposure, investing in sovereign capability, and aligning economic and security settings.
Clarity is the starting point. Resilience is the response.
Without action, Australia will increasingly make choices within constraints set by others.
