Political

Australia’s political influence in Southeast Asia is relatively limited, partly due to its geographic isolation and the lack of substantial leverage to influence regional policies. Despite this, Australia remains a popular destination for migrants from East Asian countries. According to the Australian Bureau of Statistics, in 2021, approximately 80,000 migrants established some form of permanent residency in Australia, though the majority of these individuals came from China. Nevertheless, student visas, on the other hand, experienced a significant drop, with roughly 54,000 student visas granted to Chinese nationals in 2020, a sharp decline of about 20% from the 68,000 in the previous year. This decline directly reflects the broader increase in tensions between the two countries.

On the demographics side, Australia has a total population of approximately 26 million people, out of which about 1.4 million people are of Chinese ancestry, representing about 5.5% of the population, with some other estimates suggesting only 3.1%. The total Asian population in Australia is about 17%. Still, this number is severely scattered across many countries, with one example being the combined numbers of South Koreans and Japanese, which only represent about 0.6%. This demographic distribution clearly indicates that it is highly unlikely that any substantial electoral influence from the Asian community, specifically the Chinese community, will be sufficient enough to sway Australian parliamentary elections and, thus, policies. Now, despite this, a vast majority of Chinese Australians do express that they have a more nuanced and sometimes favorable view of Mainland China despite not wanting to live there. However, this has not deterred Australian policies from shifting towards a more confrontational stance in recent years, especially under the former Prime Minister Scott Morrison; that is, during his administration, Australia experienced ever-heightened trade tensions with China.

Last but not least, in terms of the general political alignment, the current government under Prime Minister Anthony Albanese has more or less adopted a strategy that has more resemblance to former Secretary of State Henry Kissinger’s approach to China with his ideals of Realpolitik, in which it focuses on building diplomatic relations and forming political policies tailored to the specific circumstances rather than basing it strictly on ideological differences. This approach, quite frankly, stokes a sharp contrast with the current U.S. strategy towards China, which is heavily influenced and dictated by ideological, moral, and ethical tolerances.

Economy

On the domestic economic side, Australia’s fertility rate, currently at about 1.6 children per woman, remains a concern despite its decade-long social policies incentivizing childbirth. This rate is well below the replacement level of 2.1, highlighting the urgent need to attract younger workers to sustain the workforce in the future. Consequently, future policies are likely to focus on more favorable immigration terms, particularly from countries with an abundance of skilled labor, most notably India and China. This could potentially create an environment where these demographical changes could sway future election results, thereby influencing policy directions.

Externally, Australia maintains extensive economic ties with East Asian and Southeast Asian countries, particularly in the export sector. China is Australia’s largest trading partner, with trade valued at approximately 122.4 billion US dollars, accounting for roughly 33% of all Australian exports, according to 2023 official data. Australia also enjoys a significant trade surplus with China, which means that it exports much more than it imports. This surplus, valued at 53.4 billion US dollars, although generally viewed as economic strength and positive economic growth, also highlights Australia’s economic dependency on China, which also poses a geopolitical risk. China’s punitive tariffs on Australian barley and wine and bans on coal and timber imports in the last couple of years under former Prime Minister Morrison exemplify these very vulnerabilities. Although these restrictions have since been relaxed and largely lifted, they demonstrated the potential economic harm such measures could inflict when close economic ties are weaponized as geopolitical leverage.

This is also true when it comes to Australia’s economic reliance on its export of raw materials, particularly when it comes to iron ores and coals. In Australia, iron ore represents about 35% of all exports, with 80% of that going to China, followed by Japan at 7% and South Korea at 6%. Coal, on the other hand, accounts for roughly 15% of exports, also primarily going to Japan, China, and South Korea at 35%, 30%, and 20% respectively. Liquefied natural gas, also known as LNG, is another big export commodity that constitutes about 10% of all exports, again, mainly to Japan, China, South Korea, and Taiwan, at 40%, 30%, 20%, and 10%. This immense dependence on raw material exports highlights precisely Australia’s economic importance, which includes some of the most important strategic U.S. military allies in this region.

Now, comparatively, the United States is merely just Australia’s fifth-largest trade partner, with a much smaller economic presence at around 13.5 billion US dollars in exports and 30.6 billion in imports, predominantly in wine, beef, and aircraft parts, the areas of exporting commodities with the least economic significance by proportion. Australia also has a very pronounced trade deficit with the U.S., which amounts to an astounding figure of 17.1 billion US dollars.

Military

In terms of Australia’s military strength, it does not possess a particularly large military budget. According to the official 2023 data, the military budget for the year was roughly 32 billion US dollars. Comparatively, this budget places Australia at 12th globally, aligning with its GDP ranking and placing it slightly behind Italy. When compared with China’s 230 billion US dollar military budget or the U.S.’s 842 billion US dollar budget, Australia’s military spending is very modest at best. However, a country’s military strength cannot be gauged merely by its GDP or military budgets; one must also consider its strategic reserves and the type of armament it wields.

In this regard, Australia’s naval capabilities, based on 2023 data, include three Hobart-class destroyers, six Collins-class submarines, and numerous smaller ships and boats, but no aircraft carriers. The Air Force is equipped with about 72 F-35As, along with other aircraft such as the Hornets, Growlers, transport aircraft, and helicopters. Now, while Australia does possess some surface-to-air missiles, they are not particularly noteworthy. However, with the significant development of the 2021 AUKUS agreement, Australia may eventually be provided with some nuclear-powered submarines. However, these submarines are not expected to be operational until around 2030, which may be too late if there is an anticipated conflict in the Taiwan Strait by 2027. Despite this, Australia does regularly conduct joint military drills with the U.S. and other East Asian allies like Japan in an effort to prevent Chinese naval vessels from reaching the open sea.

Now, when we shift focus to Australia’s readiness for war, we notice significant vulnerabilities, particularly concerning its crude oil and petroleum imports. Granted, Australia does import both crude oil and petroleum, but its import countries are worth taking a closer look. Now, crude oil is the oil extracted from the ground that requires refining before use, while petroleum is refined and ready for use. Data indicates that Australia favors importing petroleum over crude oil. In 2023, about 25% (45 million barrels) of Australia’s crude oil imports came from Malaysia, 20% (36 million barrels) from Vietnam, and 15% (27 million barrels) from Indonesia. Although all three of these countries are among the largest oil producers in Asia, Vietnam’s political alignment with China poses a potential risk. In the event of a military clash in the South China Sea or the Taiwan Strait, China could leverage its economic influence to pressure Vietnam into halting exports to Australia, resulting in a loss of 20% of crude oil imports. This would likely drive up domestic inflation and cause internal instability within Australia, let alone potential military chaos.

The situation is even grimmer and more critical when we examine Australia’s import of refined crude oil, that is, petroleum. In 2023, Australia imported about 30% (60 million barrels) of its petroleum from Singapore. However, knowing Singapore’s strict non-alignment diplomatic policy and its neutral stance on geopolitical matters means that China could potentially disrupt this supply as well. Similarly, Australia also imports a significant amount of petroleum from South Korea and Japan—countries without their own crude oil, acting only as refining intermediaries before reselling it to other countries. In the event of a conflict in the Taiwan Strait, South Korea and Japan, as part of the first line of defense in the island chain containment strategy, would likely prioritize their own military needs over exports. This could lead to Australia losing an additional 35% of its petroleum imports—20% (40 million barrels) from South Korea and 15% (30 million barrels) from Japan. Such a scenario poses a significant risk not only for military strategy by rendering military armament useless without fuel and its geopolitical instability but also for inflationary unrest within the Australian population.