Beyond Balancing: Australia's Dual-track China Policy

This paper disputes the popular view that Australia has embraced a balancing posture against China after ditching its previous hedging policy. This is because a balancing perspective does not reconcile with the fact that Australia still actively cultivates economic ties with China. Instead, this paper proposes a new dual-track approach to explain Australia's China policy. It posits that states can simultaneously pursue balancing and cooperation toward rising powers even after the establishment of threat certainty. Gains from trade with rising powers enhance their long-term aggregate power, which in turn enables more effective balancing against rising powers. Australia, a typical trading state, is particularly motivated to pursue this dual-track strategy toward China to maximize both its security and power. Although this dual-track approach also exhibits the co-presence of balancing and cooperation, it is very different from the hedging approach. While the hedging approach rests on the uncertainty of threats posed by a rising power, the dual-track approach is defined by such certainty. Whereas the hedging approach pursues limited and restrained balancing to manage the security dilemma with rising powers, the dual-track approach practices hard balancing. While the hedging approach uses economic engagement to shape a rising power's intentions and behaviors, the dual-track approach only seeks profit from a rising power's economic ascent. Finally, while the hedging approach allows largely unrestrictive economic cooperation, the dual-track approach incorporates geoeconomics to restrict cooperation in security sensitive domains. This dual-track perspective not only offers a new and novel perspective on how states respond to power shifts but also explains the "fear and greed"motto that underlies Australia's China policy.