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Australia’s security and economic ties have been shaped by global interactions, with conflict and geopolitical rivalry often redefining its role in the world. Today, these relationships could hold the key to lasting peace and prosperity.
Since Federation in 1901, Australia’s place in the world has been shaped by a succession of shifting and increasingly complex economic, political and geostrategic partnerships.
At the century’s dawn, our deepest ties remained firmly entrenched with the British Empire: trade routes carried wool, wheat and gold to London, political loyalties were anchored in Westminster and imperial defence conventions saw Australian contingents fight under the Union Jack in the two world wars.
Yet even as Australian troops marched into Europe, economic links to Asia quietly expanded. From the 1920s, mandarins in Canberra began to register the burgeoning prosperity of China, Japan and the Netherlands East Indies (now Indonesia).
Though official sentiment remained wedded to firm entrenchment within the British Empire as our primary source of economic, political and strategic security, Australian merchants and pastoralists cultivated emerging markets in Shanghai and Nagoya, serving as early harbingers of a two‑way Pacific trade that would blossom only decades later.
The Cold War brought geostrategic realignment. Canberra’s disappointment with Britain’s retreat “East of Suez” drove a new reliance on the United States, particularly following the devastation of Britain’s global power throughout the Second World War and most notably in the Indo-Pacific following the Fall of Singapore in early 1942.
The 1951 ANZUS Treaty and involvement in the Korean and Vietnam wars anchored Australia firmly in a US‑led security architecture, even as economic growth remained tightly bound to UK preferences. Simultaneously, decolonisation in Southeast Asia created nascent nation‑state neighbours, prompting Canberra to forge the Colombo Plan (1950) and later to help establish the Association of South-East Asian Nations (1967) as a bulwark against Communist expansion.
By the 1970s and ’80s, successive governments recognised that Australia’s future lay in the rimlands of the Indo‑Pacific. Whitlam’s recognition of the People’s Republic of China in 1972 was a watershed, opening the way for a trade relationship that, in the 21st century, has come to dominate our exports of iron ore, coal and agricultural products.
Meanwhile, the launch of the Asia-Pacific Economic Co-operation in 1989 institutionalised Australia’s economic engagement across the broader Pacific basin. In the new millennium, the “Indo‑Pacific” concept reframed our strategic outlook.
Rising Chinese influence compelled Canberra to diversify defence ties, deepening cooperation with Japan, India and South Korea through the Quad and related forums. Trade agreements from the Japan‑Australia Economic Partnership to the Comprehensive and Progressive Agreement for Trans‑Pacific Partnership have woven Australia ever more tightly into regional supply chains.
Today, Australia’s economic fortunes, political alliances and security architecture rest on an intricate web of relationships forged over more than a century. From imperial appendage to independent regional actor, our journey highlights both the resilience and adaptability of a nation determined to secure its place amid the complexities of the Indo‑Pacific.
However, the growing complexities of the “new world order” emerging across the globe, but especially across the Indo-Pacific, requires a rapid rethink of just how Australia’s interdependence with our neighbours will shape our geopolitical doctrine moving forward.
Highlighting the importance of Australia’s complex web of interdependent economic, political and strategic relationships as the central pillar of Australia’s grand strategy is Dr Peter Layton, a visiting fellow at Griffith University’s Griffith Asia Institute, in a piece for ASPI titled Ensuring Australia’s defence through complex interdependence. Here Layton articulated the need to do more to embrace our complex web of interdependencies to offset our over-reliance on a single point of “strategic failure”, in this case our over-dependence on the United States.
Stronger together – aggregated strength
Since the end of the Cold War, Australia’s current defence posture rests on two “grand strategies”: a balance of power alliance with the United States implicitly directed at China and an engagement approach focused on Southeast Asia and the Pacific both of which no longer match the realities and assumptions Australia’s policymakers believed since the 1990s.
This reality has only become more apparent since the disastrous withdrawal from Afghanistan in 2021. The United States’ reliability and capability to respond in a crisis has become uncertain and Australia’s fastest-growing two‑way trade relationship lies beyond its traditional regional focus.
In order to account for this challenge, Layton articulated the need for Australia to establish and enhance both formal and informal economic, political and geostrategic relations across the Indo-Pacific to more effectively and efficiently overcome the inherent weaknesses in Australia’s two concurrent “grand strategies”.
Layton said, “Australia’s defence thinking is based on outdated grand strategies. Adopting a complex interdependence grand strategy could create robust connections with many countries, enhancing national resilience to strategic, economic, technological and societal shocks. Specifically, Defence would need to consider how to build resilience into its relationships to support Australian defence capabilities and industry.”
However, underpinning this approach is a complex interdependence grand strategy which would instead seek to weave a durable web of formal and informal ties across a broad spectrum of nations, making those relationships so valuable to partners that they would be reluctant or unable to sever them.
This resilience‑centred model recognises that no country can absorb major strategic, economic, technological, environmental or societal shocks in isolation and so must build asymmetrical interdependencies that others have a hard‑nosed incentive to maintain.
Recognising this, Layton advocates the need for greater resilience at the core of a complex “interdependence strategy”: “In an uncertain world, resilience is increasingly important as it allows a country to recover from major shocks, be they strategic, economic, technological, environmental or societal. To be sufficiently resilient, Australia must connect with other countries; no nation can thrive alone.
“In a complex interdependence grand strategy, the objective would be sustaining international links that support national resilience. Achieving this will require formal and informal links with others that are problematic for them to break, whether intentionally as China is prone to, or carelessly as the US is now doing.”
One can’t help but draw comparisons to the level of complex interdependence proposed by Layton as a modern embodiment of the “Golden Arches” theory of international relations that can be effectively summarised as no two nations that have a McDonald’s have gone to war with one another.
While that might be a simplistic explanation, it holds true, but what Layton envisages is a web of complex interconnectivity that maximises the asymmetric areas of advantage in order to offset brittleness and weakness of the individual. Layton said, “Developing such links involves creating asymmetrical interdependences that can be purposefully exploited to ensure robustness. Links with Australia must be in the hard-nosed self-interest of the other states to continue. Fuzzy talk of shared values or reminders that ‘we’ve always helped you’ fall apart in difficult times when international relationships are most threatened.”
Layton expanded further, saying, “No single nation can provide the breadth or robustness of links that Australia’s resilience requires. This strategy would aim to weave a durable connective web of diverse relationships balanced to meet a range of possible shocks. In devising this web, a starting point might be considering Australia’s significant two-way trading partners: China, Japan, the US, South Korea, India, Singapore, New Zealand, Malaysia, Taiwan, Thailand, Britain, Germany, Indonesia and Vietnam.”
While this approach covers the overlap between economic and geopolitics, Layton’s proposal expands to increasing Australia’s formal and informal strategic and security relationships across the region, far beyond our dependence on the United States.
Expanding our security partnerships
At the core of this is the growing understanding that the United States has become “unreliable” in recent years, while this often overlooks the steady decline of America’s capability and public willingness to act as the world’s policeman since the mid-2000s beginning under President Barack Obama (sorry, yes I said it).
With that in mind, particularly the declining US emphasis on the Indo-Pacific (in spite of the rhetoric from both sides of Washington’s political spectrum) and continued emphasis on controlling the volatile geopolitical, economic, security and ethno-religious maelstrom that is Middle East, Layton advocates for a greater emphasis on Australian defence collaboration in the region.
Layton, citing the nation’s growing relationship with Japan, said, “The focus of Defence would shift to building durable two-way links across multiple nations, rather than maintaining its heavy one-way reliance on the US. For example, this would mean favouring Japanese-designed frigates under SEA 3000.
“This would involve engaging Australian industry to build elements for use in both nations’ ships, such as Naval Strike Missiles, uncrewed submarines, towed sonar arrays and Nulka active decoys. Similarly, Australia might avoid buying more F-35 fighters in favour of joining the Global Combat Air Program, a sixth-generation fighter project involving Britain, Italy and Japan.”
Adding further colour to this shift in regional dynamics and highlighting Australia’s increasing economic interconnectivity with the region, Layton said, “Secondly, defending Australia’s international links would become a shared problem. This was not so in World War I and early in World War II, when others were unconcerned. For example, Australia should discuss with South Korea and Japan how to protect the large-scale seaborne trade in energy resources between them and Australia. Pragmatic, cooperative efforts to address this problem may help deepen other beneficial links.”
Finally, Layton added, “Thirdly, Australia’s defence industry could deepen engagement with key countries. The industry is on the cusp of being a regional uncrewed system manufacturer, including high-end Ghost Bats and Ghost Sharks, and more affordable Speartooths and Bluebottles. Australian-made uncrewed systems have also been combat-proven in Ukraine. An ongoing effort to export uncrewed systems, or build them offshore bilaterally, could yield valuable links. Such export sales would also help maintain the viability of Australian defence industry as AUKUS dominates defence spending.”
Under this approach to a national “grand strategy”, Layton outlined a plan where no single nation would dominate Australia’s defence decisions; instead, choices would be driven by the robustness of multilateral links in the face of varied shocks, ensuring that Australia’s security is underpinned by the self‑interested commitments of a diverse network of states.
Final thoughts
A lot of what Layton advocates for in his ASPI piece, Ensuring Australia’s defence through complex interdependence, could be broadly considered as a “common sense” approach to enhancing and diversifying Australia’s economic, political and strategic relationships to avoid a “single point of failure” that risks leaving the nation exposed.
From the economic and industrial perspective in the post-COVID-19 era, much of this makes even more sense particularly as global supply chains continue to fray under the broader collapse of the post-Second World War economic order and Australia’s lack of industrial and manufacturing capacity demonstrates the vulnerability to these shocks.
Meanwhile from the defence and security aspect, Layton’s proposal to expand the military-to-military and defence industrial base collaboration between like-minded nations like Japan, South Korea, Singapore and others provides an opportunity to build critical economies of scale, aggregated defence capabilities and partnerships that are mutually invested in the broader status quo.
Importantly for Australia, our leaders and the public have to be reminded that modern Australia has been largely insulated from the harsh realities of conflict, with generations having never experienced food, energy, or medical rationing, let alone understanding the economic and social upheaval such restrictions would bring to our world-leading standard of living.
To safeguard its future, Australia must build the capacity to act as an independent power, developing strategic economic, diplomatic and military capabilities more in line with great power expectations. This shift would not only reinforce Australia’s sovereignty but also position it as a key player in ensuring regional security and prosperity.
Moving beyond the prevailing mindset of “it’s all too difficult” would open unprecedented economic, diplomatic and strategic opportunities for the nation.
As tensions in the Indo-Pacific intensify and China continues to assert its economic, political and military influence, Australia faces a defining choice: remain a secondary power or embrace a larger, more independent role in an era of great power competition. Expanding opportunities for Australians while strengthening economic resilience and, by extension, reducing vulnerability to economic coercion must be at the core of government policy.
Only with a strong, diverse and dynamic economy can Australia effectively deter threats to its national interests and ensure long-term security and prosperity.
This enables a robust, resilient and capable defence capability that can protect Australia’s regional and global interests in an increasingly complex and interconnected global order.
Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below, or get in touch at
Stephen Kuper
Steve has an extensive career across government, defence industry and advocacy, having previously worked for cabinet ministers at both Federal and State levels.
