We trade with Asia yet our strategic priorities do not reflect it
Australia’s economic reality is fixated on Asia, but its strategic imagination has failed to keep pace, writes Mainul Haque.
AUSTRALIA IS DEEPLY INTEGRATED into Asia in every practical sense that matters. We trade there, we depend on it for growth, and our prosperity is increasingly shaped by it. But much of our strategic thinking continues to treat this reality as secondary.
This is the central paradox of Australian policy today: while our economic future remains fixated on Asia, elements of our strategic posture continue to assume a different center of gravity.
The gap between economic reality and strategic imagination is no longer abstract. This can be seen in trade dependence, supply chain exposure, energy fragility and the lived experience of recent global shocks including COVID-19.
Few leaders understand this more clearly Paul Keating. The effort to embed Australia in Asia was not symbolic. It reflected a strategic reading of geography, economics and long-term national interests. through initiatives such as the Asia Pacific Economic Cooperation (APEC) sought to align Australia with the region that would define its future.
That future is now our present.
Australia is a mid-sized power whose prosperity is structurally dependent on Asia.
China is Australia’s largest export destination and nine of our ten largest export markets are in Asia, including Japan, South Korea, India and the economies of the Association of Southeast Asian Nations (ASEAN).
The United States is the only country outside Asia in this group to rank third. These are not environmental relationships. They are at the heart of our export economy and national income, with mining, energy, agriculture and education deeply integrated into Asia’s demand and supply chains.
About 70 per cent of Australia’s exports are destined for Asia, and the region accounts for the majority of Australia’s trade surplus. China alone represents nearly a third of Australia’s total exports, demonstrating the depth of economic integration.
Economically, Australia is already part of Asia.
This economic reality is also reinforced socially. Modern Australia is one of the most successful multicultural societies in the world, with around 30 per cent of the population born abroad and a significant and growing share from Asia. More than one in ten Australians are of Asian descent, and Asian languages such as Mandarin, Hindi and Vietnamese are among the fastest growing in the country.
These communities bring language, cultural understanding and direct regional connections that strengthen trade, diplomacy and economic opportunities. This is not just a social achievement. It is a strategic asset.
But this deep integration often comes alongside a strategic stance taking shape elsewhere.
Since that period John HowardAustralia is increasingly basing its security architecture on traditional Western alliances. This trend resulted in commitments of $500 billion. AUKUS The agreement included plans for significant long-term investment in nuclear-powered submarine capacity from the United States and the United Kingdom.
It will take decades for these capabilities to be fully realized. By then the strategic and technological environment may have changed significantly. This raises an important policy question: whether the scale and structure of long-term defense investment is compatible with Australia’s most urgent and practical national priorities.
Australia simultaneously faces significant domestic pressures.
Our healthcare system is under pressure, house prices have reached crisis levels and cost of living pressures continue to mount. Homelessness is on the rise in major cities and high education debt continues to put pressure on young Australians to build financial security.
Our aged care system is also under pressure; 3,000 older Australians occupying hospital beds This is due to the lack of suitable aged care placements. This is contributing to hospital congestion and reflects wider structural tensions across health and social care systems (we need an alternative model of aged care, which I have written about before).
Energy security further highlights Australia’s vulnerability. Although we are a major exporter of raw energy resources, we do not have sufficient domestic refining capacity and are largely dependent on imported refined fuel. We export raw materials and import processed energy at higher costs; This exposes the economy to global price fluctuations.
Recent reports have highlighted that rising diesel and fuel costs are already being passed on to consumers. transport operators and tourism businesses, with additional fees and service regulations affecting the real economy. This is not an abstract risk. It already shapes prices, services and household expenses.
This situation does not happen alone. This reflects the structural dependence on regional supply chains in Asia. Recent energy challenges have shown that Australia’s economic resilience and energy security are increasingly shaped by Asia, where key supply chains and regional partnerships play a central role.
In response to Australian Foreign Affairs Minister Senator Penny Wongto have Priority strengthening relationships Recognizing their central role in energy security and trade stability, with wider participation in key regional economies such as China, Japan and South Korea, as well as in Southeast Asia.
In parallel, the Prime Minister Anthony Albanese to have directly busy with regional partners including Malaysia, Singapore and Brunei to strengthen supply chains for fuel, fertilizer and broader economic stability. These engagements reflect a practical reality: Australia’s resilience is increasingly tied to its region.
This became even clearer during COVID-19, when global systems were disrupted and the Australian economy was immediately impacted. International education has collapsed, tourism has stalled and supply chains have been broken. But the recovery has largely been driven by re-engagement with Asia, along with the gradual resumption of trade, education and mobility.
The lesson was clear. Australia’s resilience is inseparable from Asia.
This brings us to a fundamental question about national priorities:
Why is Australia devoting crucial long-term resources to strategic defense capabilities designed for uncertain future scenarios, while at the same time facing increasing pressure on key domestic systems such as health, housing, aged care and energy security?
This is not an argument against defensive capability. This is an argument for balance and consistency in national strategy.
It also heightens a deeper strategic tension highlighted in 1993. public debate By Paul Keating. Australia’s prosperity depends fundamentally on its trading relationships in Asia, including the economies that support national income and living standards.
In this context, it is difficult to reconcile long-term strategic planning that implicitly assumes potential conflict with the same region that remains central to Australia’s economic security and prosperity.
As a middle power deeply integrated into Asia, Australia’s strength lies not only in its defense capabilities but also in its economic resilience, regional confidence and domestic stability. Investments in health, housing, energy security and elderly care are not separate from national security. It is in a central location for him.
A more coherent approach could begin with a recognition of Australia’s true place in the world. This will deepen relations with Asia not only through trade, but also through long-term corporate partnerships, supply chain flexibility and people-to-people connections. It would also recognize multicultural Australia as a strategic asset rather than merely a social reality.
Paul Keating understood that Australia’s future would be shaped by Asia. This is no longer a controversial idea. It is our reality in trade, population, energy dependency and crisis response.
The question is no longer whether Australia is in Asia or not. Geography and economics have already figured this out.
We trade with Asia. We are dependent on Asia. We are shaped by Asia through our economy, our population and our experiences of global shocks.
However, strategic priorities do not always reflect this reality.
The question is whether Australia’s policy environments are fully compatible with the world as it is, rather than with the world as it once was.
Because a country so deeply embedded in Asia cannot allow its strategic imagination to drift away from this reality. At some point strategy has to catch up with reality.
Mainul Haque OAM is a retired Australian public servant with nearly three decades of experience in government, academia and community leadership.
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