Balancing against the China threat while trading with it: asymmetric power relations and Australia’s policy shifts in the Rudd government

Australia’s China policy has attracted significant scholarly attention because it combines hard balancing with the maintenance of extensive trade relations in response to China’s rise. Yet both the transformation of this policy and its underlying logic remain insufficiently understood. This article makes three contributions. First, it identifies the causal mechanism through which hedging ceased to provide an appropriate framework for interpreting Australia’s China policy, while also highlighting the limitations of balancing as a standalone explanation. Second, it advances a power-asymmetries perspective to explain why a middle power can maintain substantial trade relations with a perceived security threat while simultaneously pursuing hard balancing measures. Third, by examining Australia’s China policy from the post-Cold War period to the present, the study demonstrates that a power-asymmetries perspective provides a more convincing explanation for Australia’s post-2009 China policy. In doing so, the article contributes to ongoing debates on hedging, balancing, and middle powers’ responses to the rise of a great power.