Symposium: Australia-US Economic Relations and the Regional Balance of Power The Decline of US Economic Power and Influence: Implications for Australian Foreign Policy

Australia faces a complex set of dilemmas in foreign, defence, and economic policy. Australian governments have traditionally relied on the United States to underwrite the country's defence policies, and have regularly demonstrated loyalty to the bilateral strategic alliance. Yet, Australia's economic security has become more dependent on China, a country with which the US has a competitive relationship. This article first reviews theories of competition among great powers. It then analyses key factors that are shaping the region and the Australian policy environment. It is argued that Australia may have much to gain from acting collaboratively with other middle powers within multilateral institutions. In this context, Australia may also benefit from a more robust recognition of its own distinctive national interest.