Under the Labor government of Julia Gillard, Australia is seeking to define its destiny in Asia, a massive turnaround from its long defined policy of being closeted with the West. On 28 October 2012, Australia released a White paper titled Australia in the Asian Century, a roadmap showing how Australia can emerge as a winner in the Asian century.  In the forward of the White paper, Prime Minister Gillard acknowledges that though predicting the future is fraught with risk, it will be a greater risk not to plan for it and therefore, her government is making a conscious choice not to drift into the future unplanned but to actively shape it.

The White Paper notes that Asia’s rise is “unstoppable” and therefore, points out that Australia’s future lies in forging links with India and other booming economies of the region. It defines Australia’s aims to be maximizing links with Asia, which will push Australia into the world’s top 10 wealthiest nations by 2025. In this century, the Asian region will be the home to most of the world’s middle class and will be the world’s largest producer and consumer of goods and services.

The White Paper sets out a number of targets for Australia over the next 13 years, till 2025, to ensure that Australia fulfills its ambitions and competes effectively within Asia. It is also noticeable that even when a country’s or region’s economic weight shifts, so does its strategic weight. Australia realizes that while maximizing its economic gains accruing from Asia’s rise, the opportunities also unfold critical strategic challenges and therefore crafting appropriate policy choices becomes the priority of the Labor government.       

Australia immensely benefited from Asia’s growing appetite for raw materials and energy. After Australia signed the Treaty of Trade and Commerce with Japan in 1957 because of the then Trade Secretary Sir John Crawford’s far-sightedness along with Dr. Okita Saburo, the architect of Japan’s Income Doubling Plan of the 1960s, not only did Australia’s enormous resources fueled Japan’s rapid economic growth in the 1960s and 1970s, but also China benefited in the 1980s after the introduction of market economy.

The level of economic interdependence has so deeply increased that the economies of Australia with Japan and China have become intrinsically linked. A similar pattern is developing between India and Australia following India’s sustained economic growth that seeks uninterrupted supplies of resources. As a major exporter of natural resources, Australia has an important role to play. Gillard’s visit to India in early October and her government’s decision to lift the ban on uranium exports is a significant step forward. A civil nuclear cooperation agreement will soon elevate bilateral ties to a higher plane.

As Australia realizes the benefits it has obtained from Asia’s rise so far, it is gearing up to the task of what Asia might need next and what could be the possible challenges. Based on its own assessment of how Asia is likely to behave economically in the next 13 years, the White paper makes projections for Australia’s strategy.

It notes that by 2025, Australia’s GDP per person will shoot to 10th position from 13th position (in 2011). This means its productivity must receive a boost. This again would mean that Australia’s average real national income will be about US$73,000 per person in 2025, compared with about US$62,000 in 2012. The White paper notes that by 2025, Australia’s school system will be in the top five in the world, and 10 of its universities will be in the world’s top 100. It further notes that globally Australia will be ranked in the top 5 countries in doing business dealings and that its innovation system will be in the world’s top 10.

Therefore, studies on Asia will be a core part of Australian school curriculum. The next logical step, according to the White paper, will be to ensure that Australian students have continuous access to a priority Asian language such as Chinese (Mandarin), Hindi, Indonesian and Japanese. The objective is to make future Australian leaders more Asia literate, with one-third of board members of Australia’s top 200 publicly listed companies and Commonwealth bodies having deep experience in and knowledge of Asia.

As Australia's economy gets increasingly integrated with Asia, its trade links with Asia will be at least one-third of GDP, an increase of one-quarter from the present. Commensurately, Australia’s diplomatic network will have a larger footprint across Asia supporting stronger, deeper and broader links with the Asian nations. Continuous economic growth driven by Australia’s linkages with Asia not only helped Australia to pull through the Global Financial Crisis successfully and avoid recession; it also enabled it to prevent the loss of hundreds of thousands of jobs.

Its track record of engagement with the nations of the region shows that its principal relationships with China, India, Indonesia, Japan and South Korea have strengthened in recent years, besides its alliance with the US remaining as strong as ever. Its institutional regional engagement combines the ongoing strength of the Asia–Pacific Economic Cooperation (APEC) forum with the now-developing East Asia Summit. Australia wishes to build on all of these strengths and seize opportunities offered by the Asian century.