Australia Makes Another Pitch to China
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By Enda Curran

SYDNEY--Australia will attempt to deepen its strategic relations with China and increase military exercises with Asia's largest economy as part of a new national security strategy that Prime Minister Julia Gillard said will boost the country's influence across the region.

A key ally of the U.S., Australia has had to balance a growing economic reliance on China - it's largest trading partner-while boosting cooperation with Washington as part of President Barack Obama's 'pivot' to Asia. In 2011 Canberra allowed the U.S. military rights to base up to 2,500 marines near the northern city of Darwin, a decision that drew criticism from Chinese officials.

By boosting its diplomatic reach and stepping up military cooperation, Ms. Gillard vowed to pitch Australia as a "middle power" that can play a role in solving regional disputes. She warned that the rise of China will fuel competition between Beijing and Washington, heightening the risk of a diplomatic miscalculation that sparks new conflict.

"We remain optimistic about the ability of China and the United States to manage change in the region, but their relationship inevitably brings with it strategic competition as China's global interests expand," said Ms. Gillard, key note speech Wednesday when she unveiled a new strategy for national security. "None of these developments of themselves make major power conflict inevitable but they do make the consequences of any conflict more far-reaching and dangerous."

The plan includes hosting more military exercises with China at a time when Beijing is involved in a growing number of territorial disputes across Asia. In December, Sydney hosted a flotilla of three Chinese naval vessels in a rare visit to Australian waters. The warships were returning from operations in the Gulf of Aden.

"This will include joint military exercises and high-level military exchanges with China, reflecting in defence the cooperative spirit that exists in the other aspects of our friendship," she said.

This comes at a time when diplomatic tensions are rising across Asia. Both China and Japan have clashed over a group of small uninhabited islands known as Senkaku in Japan and Diaoyu in China. The Philippines is taking a territorial dispute with China over the resource-rich South China Sea to an international tribunal, a high stakes gamble in a spat that already involves several countries.

And late last year North Korea successfully fired a long range missile that drew criticism from governments around the world and China landed a jet fighter on its first fully functional aircraft carrier.

Australia has been critical of North Korea's nuclear aspirations, but typically steers clear of taking sides in territorial disputes.

Warning that "years of fiscal stringency" lies ahead for militaries in the U.K., U.S., Europe and Australia, Ms. Gillard's ruling Labor government implements savings of over five billion Australian dollars (US$5.2 billion) by deferring the purchase of military hardware, shedding civilian staff and cutting back on existing programs.

An overview of the country's defence outlook is due to be published later this year.

Write to Enda Curran at enda.curran@wsj.com
http://online.wsj.com/article/BT-CO-...22-714489.html