DAVID GREENE, HOST:
U.S. Secretary of State Rex Tillerson is visiting Australia next week. This is the first stop on a three-day tour of Australia and New Zealand. Now, for decades, Australia has been one of America's strongest allies. But as NPR's Rob Schmitz reports from Sydney, the country is in the midst of a pivot towards China.
ROB SCHMITZ, BYLINE: Sydney Harbor - it's got sailboats, the Harbour Bridge, the iconic opera house and increasingly middle-class tourists and immigrants from China - a reminder, says University of Sydney history professor James Curran, of China's rising importance to Australia.
JAMES CURRAN: Public opinion polling has shown that when you ask Australians which relationship is most important to them in the world, it's almost equally placed between the United States and China. Now, that in itself is a fascinating shift.
SCHMITZ: Fascinating because, historically, Australia's alliance with the U.S. has been one of its strongest. It's stood with the U.S. in every war since World War I.
CURRAN: But what's happening, I think, is that the government is realizing that amongst millennials, for example, amongst younger Australians, that support is not as strong as it used to be.
SCHMITZ: And this is the Australia Rex Tillerson may have to win over when he arrives here for meetings with Australian leaders. Curran says there's always been an expectation that Australia would line up behind the U.S. in the event of a conflict with China. But times have changed, and Australia's loyalties are shifting.
JAMES LAURENCESON: I think the economics is actually really important here.
SCHMITZ: James Laurenceson, an economist at University of Technology Sydney, says Australia is becoming more and more dependent on China for its economic growth.
LAURENCESON: Australia has a completely different discussion about China compared with the U.S. and compared with most of Europe. We run a huge trade surplus with respect to China, 20-25 billion. Our biggest trade deficit is with the U.S.
SCHMITZ: And Australia's biggest trade partner is now China. A third of the country's exports, like Australian beef, wine and iron ore, go there. Many economists believe the reason Australia weathered the global recession after 2008 was because of China's huge demand for Australia's raw materials. Australian political commentator Tom Switzer.
TOM SWITZER: The rise of China means different things for America and Australia. For America, it's the rise of a potential geopolitical competitor, not just regionally but potentially globally. But for Australia, it's a very rewarding and rich commercial and financial relationship. China is our largest trade partner, so we are torn.
SCHMITZ: Policymakers in Australia have affixed a term to this delicate diplomatic balancing act between the U.S. and China. Australia, they say, has to ride two horses at once - examples abound. Last year, Australia's northern port of Darwin, next door to a U.S. Marine base, was leased to a Chinese company, irking President Obama. The president was also miffed with Australia's decision to join China's Asian Infrastructure Investment Bank despite U.S. objections. But how does Australia's policy of riding two horses work if those two horses start fighting? In a hypothetical conflict between China and the U.S. over the South China Sea, historian James Curran has a prediction.
CURRAN: I suspect that if China provoked some sort of crisis, Australia would be there. I don't doubt that for a second. It would be a difficult decision, but history, sentiment and culture would, I think, dictate that Australia support the United States.
SCHMITZ: On the other hand, if the U.S. were to provoke the crisis, says Curran, it's likely Australia would choose the other horse to ride. Rob Schmitz, NPR News, Sydney. Transcript provided by NPR, Copyright NPR.
