Australia's Prime Minister Julia Gillard is in many ways a typical Australian, and like most Australians she does not know what to think about China. 

Gillard understands that China's growing economy is central to Australia's economic future.

But she does not yet understand how fast China's political and strategic power is also growing, with equally important consequences for Australia's strategic future.

As a result, Gillard does not yet understand how Australia's relationship with China must evolve.

Gillard has set up new senior committees in Canberra to implement her China-centric vision of Australia's future, and seeks new consultative forum with Beijing to broaden and deepen the relationship.

All this is welcome, because Canberra has not yet done enough to engage with China at a level that matches its importance to Australia's future.

But these steps will make little real difference until Gillard understands more clearly just how much China's rise changes the region Australia lives in.  Like most Australians, she not yet really accepted that Beijing will increasingly shape Australia's strategic environment as well as its economy.

This is understandable in a way, because Australia never encountered an Asian neighbor as powerful, or as important to Australia, as China is today.  

Ever since the first British settlement over 200 years ago, Asia has been dominated by Australia's close "Anglo-Saxon" allies, first the UK and then the US.

That era is passing with China's rise.

The US can no longer dominate Asia as it has done for so long, and Canberra can no longer rely on US power alone to keep Asia stable and Australia safe.

This is unfamiliar and unsettling for Australians. They have to rethink their whole approach to foreign policy, and abandon some comfortable assumptions. 

There is no doubt about Gillard's commitment to the economic relationship. Like all Australians, she sees China as the essential locomotive for Australian growth. She hopes that it will keep growing richer and keep buying more of Australia's mineral exports.

That's Canberra's only concept for Australia's economic future. There is no Plan B if China's growth stalls.

But Gillard has until recently been equally committed to supporting US political and strategic leadership in Asia.  She offered direct support by welcoming US marines to train in Darwin.

"Australia does not have to choose between the US and China" became her slogan.

Since then, however, Gillard has appeared to pull back from her unqualified support for the US de facto containment policy.

Her government has made clear that it will not offer Washington additional access to Australian bases, while her Australia in the Asian Century White Paper endorsed China's right to expand its military power, and rejected any suggestion of "containing" China. 

So it seems that Gillard is starting to recognize that Australia does have a choice to make after all. 

It is not a simple question of siding with either the US or China, because Australia must do all it can to remain close to both of them.

It is a much more complex question about how Australia can position itself between these two great powers.

Like all of China's regional neighbors, Australians do not want to live under China's shadow, so they hope the US will continue to play a big role in Asia to balance China's power. On the other hand, they also want to get on well with China, and they want Washington and Beijing to get on well with each other.

That will only be possible if the US future role in Asia is broadly acceptable to China.  So Australians, like others in Asia, want the US and China to reach agreement on the way they share power in the Asian century.

That means the US and China must agree to work together, recognizing each other's interests and accepting the need for mutual compromise. That will involve big sacrifices on both sides.

The US will have to accept that it can no longer lead Asia the way it has done for decades. China will have to accept that even as its wealth and power grow, it will not be able to dominate Asia the way the US has done in the past.

Australia should do all it can to encourage Beijing and Washington toward an accommodation, and at least make sure that it does nothing to make things harder, as some of its policies in recent years have tended to do. 

And it also needs to recognize that no matter what kind of relationship Beijing and Washington develops in future, Australia's relationship with China is going to be very different from any relationship it has ever had with any other country before.

China is already more important to Australia in more ways than any country has ever been before, except for our two great allies the US and the UK.  How to manage such a pivotal relationship with a county that is not an ally is something Australians have not yet worked out.



The author is professor of strategic studies at the Strategic and Defence Studies Centre at the Australian National University. His book The China Choice: Why America Should Share Power, is being published in Chinese this year by World Affairs Press. opinion@globaltimes.com.cn