Ladies and gentlemen, excellencies, fellows of the AIIA, members, colleagues, friends, 

We are not quite finished yet, but as we start to bring this year’s AIIA National Conference to a close, it’s worth remembering our theme: A World Disrupted: Australia and Global Reordering. Over the course of today’s discussions, what has become clear is that we are not merely observing disruption as an external event: we are living through the consequences of a profound reordering that touches every dimension of foreign policy, domestic politics, economics, technology, and identity. 

We close this conference by acknowledging something different. There is no going back to a previous equilibrium. The disruptions we have examined today are now structural. And the challenge ahead is to understand how Australia positions itself not only to manage this world, but to shape it. 

This is, as Peter Varghese said, not a “flesh wound.” The system that suited us so well is gone. 

Keynotes

However, I really want to begin today with Heather Smith’s keynote, because it stood out not only as a highlight today, but as one of the clearest and most deeply considered contributions she has delivered at this conference. And I promise I’m not just saying that because she’s my boss. 

Heather’s remarks demonstrated an even sharper insight into the forces reshaping our strategic environment. Her argument that “Australia is drifting into the new paradigm” captured precisely the concern that threaded through our panels: that the world is changing faster than our policy structures or political imagination. 

Her description of the “spectacle of the coalition of the authoritarians” in Beijing was not theatrical language. It was a diagnostic. A signal that revisionist powers are coordinating narratives and postures aimed at drawing a line under a supposed pax Americana. 

And her reminder that the changes in the global financial system will be deeper than those in the trade system underscored a key theme today: that economic order is fragmenting in ways not yet fully understood. 

Crucially, Heather argued that the United States underestimated China’s ability to withstand a trade war, and she used the term “crossfire” to describe Australia’s position between the two giants. Not simply caught between them strategically, but structurally and economically tied to one, security-dependent on the other, and deeply invested in the norms that both now contest. 

Heather’s assessment that “to say that Australia is not positioned for this world is an understatement” landed heavily because it reflected a throughline across multiple panels. And her reminder that it is not necessarily in Australia’s interests for China’s economic rise to be constrained was a call for nuance–it’s strange that some see that as a dirty word–in national strategy, something very much needed at a time when global narratives are hardening. 

Yet, as she reminded us, we are not without agency. We can leverage geography, invest in self-reliance, and build more sophisticated Asia knowledge. Perhaps her most striking point was that understanding China is not the same as agreeing with China, a distinction that Australia has not always communicated well in public debate. 

We also heard today from political leaders, including Shadow Minister for Home Affairs Jonathan Duniam, who argued that Australia must be in a mode of “listening as well as leading in the region.” This balance—quiet attentiveness alongside strategic assertiveness—mirrors the sentiments across the Indo-Pacific. 

He reminded us that while military force creates the space for diplomacy to work, diplomacy itself requires sustained commitment, trust, and presence. And he reinforced that in his view the US alliance is fundamental, but cannot substitute for regional engagement or Australian agency. 

Mathias Cormann reinforced a similar point from a different angle: trust in multilateral systems must be rebuilt, and those systems must be not only effective but fair, with benefits more evenly distributed across the globalised economy. 

As Peter noted, multilateralism is not dead, even if we have lost “global multilateralism.” 

Quiet Strength: Regional Friends and the Shape of the Indo-Pacific

Our session on regional friends made something very clear: the Indo-Pacific is no longer defined, if it ever was, by neatly ordered alliances or singular structures. As Lisa Singh memorably put it, we now operate in a “soup”–I love that term, and I intend to use it—of bilateral, minilateral, and multilateral arrangements: overlapping, sometimes duplicative, sometimes complementary, but increasingly essential. 

From Japan, Satake Tomohiko stressed that the regional order is changing and that Australia and Japan must cooperate to support a “transfer of order,” ensuring continuity even as the architecture shifts. Importantly, he noted that in minilateral frameworks, “Australia is always there,” a reminder that presence itself is strategic capital. 

This was echoed by Adrian Ang from Singapore, who pointed to the recent Indonesia–Australia security agreement as part of a new latticework less reliant on the United States. His question—how long can ASEAN maintain centrality without unity?—remains one of the toughest in the region. 

Profit and Peril

Our economic discussions made one point overwhelmingly clear: disruption does not halt commerce, but it does reshape its foundations. 

Simon Birmingham observed that if past AIIA National Conferences debated whether the world was disrupted, this year settles the matter: disruption is no longer hypothetical. It is historic. Yet he reminded us that the global flow of goods, services and investment is so deeply embedded that it will continue, even under strain. 

From a business perspective, Bran Black urged us to rethink how Australia can ensure its investment framework remains competitive, warning that our capacity to maintain living standards is trending in the wrong direction. 

Darren Godwell added a dimension too often overlooked: where there are indigenous interests in play in energy and other commercial projects, indigenous co-investment is essential, defining success from the outset, not something to be imported after disputes emerge. The latter is a recipe for project failure. And he pointed to Alaska as an example of Indigenous business models Australia could learn from. It’s powerful reminder that international engagement need not only occur between states. 

Between the Giants

The panel on great power relations was eye-opening. 

Several speakers tackled the uncomfortable reality that Australia does not always feature prominently in US strategic planning, or for that matter elsewhere, something I, not originally hailing from Australia but having worked on Australia from time to time during a stint at a think tank in Washington, have noticed. Elizabeth Buchanan made this point in her refreshingly straightforward fashion, and Maria Rost Rublee reinforced it, noting that Americans rarely understand what slogans like “100 years of mateship” mean in practice, if they have ever heard them at all. 

This aligns with a broader observation today first articulated in Heather’s speech: that Australia’s narrative of the United States is often “narrow, binary, and circular”, missing the deep internal dynamics now shaping US foreign policy. This includes the politics of grievance Heather and I both highlighted. 

Philipp Ivanov echoed Heather’s concern on our Asia competitiveness, and also described a new quiet confidence in Chinese diplomacy, even as Chinese society shows fatigue. 

Ukraine came up, as it should, with several on the panel and later Linda Reynolds noting that Ukraine is teaching us about resilience and leadership. It was also fairly questioned whether the West is doing all it can to help Ukraine not only survive, but win a war that implicates the erosion of principles like sovereignty that underpin any sense of global order. 

Pressure Points

On the panel on how international tensions are aggravating domestic politics, Kate Seward from Microsoft reminded us that tech can be both problem and solution in the fight against misinformation and that diaspora communities are uniquely vulnerable to manipulation. 

Tim Watts spoke powerfully about Australian identity. Only 10 percent of Australians believe being born here is central to being Australian, a contrast with Japan’s 90 percent and America’s 40 percent. Australia’s embrace of newcomers, something I personally felt strongly at my own citizenship ceremony a few weeks ago, remains one of our greatest strengths. As he said, we don’t build pillars or silos; we build an “amorphous” inclusion, imperfect but evolving. 

And Anthony Bubalo underscored this: Australians do not need to abandon their national identities when they adopt an Australian one. Expecting otherwise, he said, is simply political laziness. 

Nevertheless, among the Australian optimism was a voice of perhaps German pessimism. Christian Rieck stressed that institutions, not just good intentions, are required to protect democracy, especially when indecent politicians appear, a reflection, perhaps, of very different political circumstances. 

The End of Order?

We didn’t hear much, or at least, skipping between parallel panels, I did not hear much, about the United Nations, until we got to Gary Quinlan, who warned that when we are considering new systems of global order, “we shouldn’t throw the baby out with the bathwater.” Organs like the World Heath Organization and World Food Program still have a central role to play. 

How these very human-centred institutions as well as nation state governments will be affected by AI was taken up by Toni Erskine, who emphasised that AI was a potential agent of disorder, with competition baked into its processes.  

Central Themes of the Day

Across every panel and keynote, several threads emerged: 

1. Disruption is no longer episodic. It is structural. 

2. Order will need to be renegotiated, not restored. 

3. Australia has agency, but not if we remain complacent. 

4. Asia literacy, strategic creativity, and institutional resilience matter more than ever. 

5. Our relationships—U.S., China, ASEAN, Japan, regionally—require deeper sophistication. 

6. Identity and social cohesion are national security assets. 

Above all, the message today was that the Indo-Pacific is not waiting for us to catch up. The region is already moving, through minilaterals, economic realignments, technological shifts, and new diplomatic confidence. 

Australia must move with equal speed, clarity, and imagination. 

The Work Before Us

We will do formal thank-yous soon, but for now thank you to all our speakers, our panel chairs, our branches, our sponsors, and our staff. 

And thank you to Heather Smith, whose leadership, insight, and clarity helped frame today’s discussions. As I said earlier, this was the strongest version of her annual keynote I have heard, and it will set the tone for the work ahead of us. 

As we leave this year’s conference, let us do so with a renewed sense of purpose. A world disrupted is not only a world of danger; it is also a world of opportunity for countries willing to think differently, act decisively, and engage consistently. 

That is the work before us. 

And as Zara’s example shows us,¹ we are the people who will do this. Our thousands of supporters and members around Australia volunteer to support these discussions and engagement. 

The AIIA will continue to support Australians to know more, understand more, and engage more as this new global order takes shape. 

Thank you. 

Dr Bryce Wakefield is the CEO of the Australian Institute of International Affairs. This speech has been reconstructed from his notes. For the exact speech, refer to the video, available soon. For keynote speeches and a list of all speakers of the 2025 AIIA National Conference, refer to the conference homepage.

This speech is published under a Creative Commons licence and may be republished with attribution to the AIIA.

1. Zara Kimpton OAM FAIIA, who was previously AIIA Victoria President and AIIA National Vice President, was awarded the inaugural Nance Dickins Medallion for exceptional service to the AIIA. The award pays tribute to Nance Dickins, who for decades served as Secretary of the AIIA. Former AIIA National President the late Allan Gyngell AO FAIIA, who conceived of the award, insisted that Kimpton should be the first awardee, and the AIIA Board confirmed his preference this year.

In The Three-Body Problem, Chinese science fiction writer Liu Cixin imagines a world held hostage by the gravitational chaos of three stars – a system so unstable that the civilisation cannot predict, let alone control, its next moment of safety or demise. Survival requires navigating continuous, disorienting flux. Australia today faces its own version of this logic. Our relationship with China has become a three-face problem: a precarious juggling act in which we must counter, compete and cooperate with Beijing – simultaneously and without certainty.

Chinese officials have been candid about how they see this. They have described Australia’s foreign policy as “two-faced.” In truth, they’re only half right. Australia’s diplomacy is necessarily three-, four-, or even five-faced – because in an era of great-power rivalry, the ability to hold multiple, sometimes contradictory, postures is not duplicity. It is the essential skill of statecraft.

The three dimensions

Australia’s engagement with China operates across three distinct but interconnected dimensions, each requiring different strategies and presenting unique risks.

First, we counter China where it threatens our security. Australia actively defends against Chinese cyber operations, foreign interference, and other intrusions on our sovereignty. This isn’t rhetorical posturing – it’s the hard work of protecting democratic institutions, critical infrastructure, and national and institutional decision-making from covert influence. The establishment of our foreign interference laws, economic security agenda and the strengthening of intelligence capabilities reflect this dimension of the relationship.

Second, we compete with China for influence, partners and markets. This competition plays out most visibly in the Pacific, where Australia and China are locked in a battle for security and economic opportunities, as well as the hearts and minds of the Pacific nations through development assistance, infrastructure investment, and diplomatic engagement. The competition has now extended to critical minerals, when Australia made a bet on the US leadership to break China’s near-monopoly on the minerals which power the technologies of the 21st century economy. While Australia remains a relative minnow, our resource endowments give us potential leverage. More broadly, Australia participates in the US-led coalition working to constrain Beijing’s expansion of strategic space in the South China Sea and the wider Indo-Pacific.

Third, we cooperate with China in trade, education, research and through extensive people-to-people links – connections that remain foundational to Australia’s prosperity and social fabric. China remains Australia’s largest trading partner. Our universities depend on Chinese students and academic talent. They also are linked to China’s vast and growing science and technology ecosystem through extensive research collaborations. Deep people-to-people links bind our societies together in ways that transcend government policy. These economic and societal ties generate prosperity and mutual understanding that neither nation can easily replicate elsewhere.

The chaotic gravitational forces of Australia’s three-dimensional relationship with China were on full display this week during the visit of Zhao Leji, chairman of China’s National People’s Congress Standing Committee and the third-highest ranking member of the Chinese Communist Party’s politburo.

Parliamentary staff were instructed to power down phones, tablets, and laptops during Zhao’s tour of Parliament House, with warnings of potential Wi-Fi disruptions. The security measures came shortly after the head of Australia’s top intelligence agency singled out China for cyber espionage and hacking. Yet the optics of the visit continued to be respectful and positive – a meeting with the Governor-General, a dinner in Parliament House, a stop at a Koala sanctuary in Brisbane.

This is not a cognitive dissonance of Australian diplomacy. It is a reality for any state engaging a great power that is simultaneously a security challenge, an economic engine and a systemic rival.

A Fragile equilibrium

Maintaining this three-dimensional relationship requires extraordinary diplomatic skill, and the Albanese government deserves credit for its performance over the past year. The relationship with China has stabilised without Australia taking its eyes off the risks. The core tenets of the US alliance remain intact, including AUKUS and the defence relationship, and the Government has unlocked new areas of alignment with the Trump administration around critical minerals. Meanwhile, relationships with Japan, South Korea and Indonesia are flourishing.

But this equilibrium is inherently fragile and can unravel at any moment. Beijing has long concluded that Australia is an increasingly indispensable part of the US alliance network, which it believes aims to contain China’s rise. From China’s perspective, Australia’s multi-dimensional approach looks like duplicity – benefiting from China’s rise while strengthening military ties designed to constrain Chinese power.

The pressure comes from both directions. When President Trump negotiates with Xi Jinping, Australian interests are far from his mind. The current trade truce between Washington and Beijing benefits Australia in the short term, but tactical bilateral deals that ignore allied interests would further erode the global trading system that Australia desperately seeks to preserve.

An even worse scenario would see any nascent US-China accommodation collapse entirely. In that event, Australia could face simultaneous pressures: Washington demanding hard choices about our China relationship, while Beijing insists on prioritising trade and diplomatic stability over American demands. Being caught between escalating US-China tensions could force Australia into precisely the kind of binary choice that our three-dimensional approach has so far successfully avoided.

The limits of agency

Australia has agency in this environment – the size of our economy and our strategic geography give us tools to influence our own fate.

Yet our agency is being undermined by failures on two critical domestic fronts. First, the government has not adequately communicated to the Australian people what this new era of uncertainty means for their lives and livelihoods. Without public understanding and buy-in, sustaining a sophisticated, multi-dimensional foreign policy becomes politically treacherous.

Second, and more fundamentally, we are not building the economic, defence and technological resilience and dynamism necessary to navigate geopolitical upheaval ahead.

None of the diplomatic achievements of the past year will matter if our economy is weak, our society disoriented, and we are dangerously unprepared to defend ourselves, absent from the game in frontier technologies, renewable energy, and electrification infrastructure. Economic strength is the foundation of strategic autonomy, advocated by some of the leading foreign policy minds in the country, such as Dr Heather Smith. Without it, our ability to maintain the three-dimensional relationship with China and resist pressure from any great power will steadily erode.

Living with chaos

In The Three-Body Problem, the civilisation on the doomed planet learnt to hibernate through the chaotic eras and emerge only during brief stable periods. Australia doesn’t have that luxury. We must remain fully engaged, navigating the gravitational pulls of multiple great powers while maintaining our own trajectory.

The alternatives to this uncomfortable, three-dimensional approach are far worse than the flux itself.

The first alternative is capitulation – accepting that small and middle powers must simply choose a sphere of influence and live within its constraints. This would mean abandoning either our economic partnership with China or our security alliance with the United States, foreclosing options and accepting a diminished role in shaping our own future. For a country of Australia’s size, resources, and capabilities, this would be a strategic and economic catastrophe dressed up as clarity.

The second alternative is conflict – treating the relationship with China as purely adversarial and abandoning the cooperative dimension entirely. This path leads to economic decoupling from the region’s largest and most dynamic economy that would devastate Australian prosperity, eliminate channels for managing tensions, and increase the risk of miscalculation and outright conflict. It would also isolate Australia from regional partners who are themselves pursuing complex, multi-dimensional relationships with Beijing.

The discomfort of three-face diplomacy is not a bug – it’s a feature. The tension between countering, competing, and cooperating creates flexibility and preserves options. It allows Australia to defend its interests without foreclosing future possibilities. It maintains economic relationships that fund our security capabilities that protect our sovereignty and, in turn, enable us to engage with China from a position of strength rather than dependence.

Yes, this equilibrium is fragile and demands constant diplomatic skill. Yes, it can unravel under pressure from Washington or Beijing. But the flux is preferable to the false stability of choosing sides or the genuine instability of confrontation. Australia’s three-face problem with China will persist because it reflects genuine strategic complexity, not diplomatic confusion. The challenge is not to resolve this tension but to manage it skilfully while building the domestic foundations – economic dynamism, social cohesion, technological capability – that give us the strength to maintain our balance when the gravitational forces intensify. Survival belongs to those who can adapt to chaos while staying true to their core interests.

This is an extended version of the remarks delivered at the Australian Institute of International Affairs National Conference in Canberra on 17 November 2025.

Philipp Ivanov is the Founder and CEO of GRASP (Geopolitical Risks and Strategy Practice) and former CEO of Asia Society Australia.

This article is published under Creative Commons License and may be republished with attribution.

We can all see our world is becoming less certain and less stable. More people are displaced. More people are hungry. There is more conflict – in Sudan, Ukraine, Gaza and elsewhere. 

Australia will always make our contribution, as part of multilateral efforts to protect civilians and uphold international law – because living in peace shouldn’t be contingent on where you were born. 

Having said that, our overriding responsibility as a middle power of the Indo-Pacific is to support peace, stability and prosperity in this region. 

The Indo-Pacific is where the world’s future is most being shaped. 

It is where we have the most on the line. 

It is where we can have the most effect. 

From our first day in office, when the Prime Minister and I flew to Japan to meet with the Quad, from my first trip to the Pacific Islands Forum and the Prime Minister’s first bilateral visit to Indonesia, the region has been our focus. 

After what some might call a mixed decade, we had a pretty big job to do. 

We needed to reassure the region of our commitment – our intent.  
 
In my first year as Foreign Minister, I travelled to every Pacific Islands Forum member and all the countries of ASEAN, other than Myanmar. 

The Prime Minister has always said that we are not here to occupy the space. 

That goes for our foreign policy. That goes for Australia in our region. 

We don’t just live here. 

We aren’t just residents. 

We are architects. 

And for the past three and a half years we have been building Australia’s future in our region. 

We build understanding, from what Anthony Albanese called the foundation of a relationship of equals. 

We build relationships. We build the inclusive infrastructure and economic opportunities to transform lives, foster stability and grow prosperity. 

We build our shared regional capacity to defend and secure our sovereignty. 

Every relationship Australia has in this region has been strengthened under our Government. 

Every one. 

And it pays to look at a map to picture the architecture I am about to describe. 

Because we have agreed groundbreaking treaties with four countries, upgraded or enhanced partnerships with six and made progress on agreements with another four. 

We have concluded negotiations on our new treaty with Indonesia. 
 
We have the Pukpuk Treaty with Papua New Guinea, transforming our nearest neighbour to our newest ally. 

We have the Nauru-Australia Treaty and the landmark Falepili Union with Tuvalu. 

We have progress towards new agreements with Fiji, Tonga and Vanuatu. 

We have stabilised relations with China, without compromising on our interests. 

And we have upgraded our relationships with Japan, Vietnam, Philippines, Laos and Brunei, enhanced our relationship with Singapore and agreed to strengthen our arrangements with India. 

None of this was thinkable in 2021. 

Yet the Albanese Government has actively pursued landmark agreements that come together to safeguard the region that we want. 

At every step, working in partnership with the region, and through ASEAN and the Pacific Islands Forum, which underpin our collective security and prosperity. 

We know we are made stronger by what we do together. 

Now, let me be clear. I said that we have advanced every relationship we have in our region. 

But that doesn’t mean that our strategic environment is getting any easier. 

The change in the regional landscape is permanent. 

The disruption – the contest– is permanent. 

China will continue trying to reshape the region according to its own interests. 

Russia, Iran and North Korea will continue to sabotage and destabilise. 

With so much activity and contest, things may not go Australia’s way every time. 

But we will keep pressing our national interest in the contest every day. 

We do that bilaterally, including with our upgraded ties around the region, but also through regionalism. 

Regionalism is one of the most effective ways for smaller and medium countries to counter power asymmetries. 

We see this every day in the power and weight that ASEAN and the PIF carry when they speak with one voice. 

Both have the capacity to build norms and set expectations – for nations large and small. 

This architecture of groundbreaking agreements secures Australia in our region. 

And they are premised on Australia’s ability to meet nations where they are at, drawing on all elements of our national power. 

You see this in South and Southeast Asia, where we know that there is a need for more investment, goods and services to boost economic development and support the transition to clean energy. 

It’s in Australia’s economic and strategic interests to respond to these priorities. 

And it offers the assurance that comes with knowing that their success is our success; to create the shared value that fosters peace and stability. 

This is why we have supported $1.2 billion in new Australian investment through our Southeast Asia Economic Strategy to 2040. 

And it is why we launched an A New Economic Roadmap for India, with a new Trade and Investment Accelerator Fund to help unlock new commercial opportunities, while continuing to negotiate an upgraded economic agreement. 

Our new $2 billion Southeast Asia Infrastructure Financing Facility is kickstarting Australian investments, including to create immediate exposure for 15 Australian super funds and supporting key projects in renewable energy, telecommunications and infrastructure. 

It is a sign of early success that one in four transactions supported by Export Finance Australia are now in Southeast Asia. 

And beyond trade and investment, we are also drawing on the expertise of CSIRO, the Bureau of Meteorology and other Australian institutions to support energy system planning, resilient transport infrastructure and the clean energy transition in the region. 

We are bringing together Timor-Leste, the Northern Territory Government and indigenous land holders to help Timor improve access to power in remote communities. 

And in similar ways in the Pacific, we are listening, consulting and responding to Pacific priorities in the Pacific way – Australia is intent on being a good neighbour and one that deals with partners with respect. 

I can’t emphasise enough how important this has been in the Pacific – where the previous government’s disregard of climate science and disrespect for the Pacific family is still raised with me today. 

The Albanese Government has invested in rebuilding relationships and restoring trust among the Pacific family – so that we can again be a partner of choice. 

Such as through the Cyber RAPID response program, which has helped restore critical services in the wake of massive cyber-attacks, or through DFAT and the ADF humanitarian operations responding to natural disasters. 

Or the way we are addressing food insecurity, with ACIAR enabling Australia to share our ability to grow food in changing climates and take our leadership in agricultural innovation global. 

Being a part of the solution on climate change is also central to our credibility in the Pacific – through our strong domestic commitments, rejoining the Green Climate Fund and investing in the Pacific Resilience Facility. 

And the driver for Australia seeking to host COP with the Pacific family was always to bring the world’s attention to the impacts of climate change in our region and elevate Pacific voices for global action on climate. 

All our Pacific engagement prioritises Pacific leadership. 

That is how we have backed the Pacific Policing Initiative and established the Pacific Response Group, complementing other arrangements like Australia’s Status of Forces Agreement with Fiji and enhanced maritime security cooperation. 

Australia is committed to remaining a reliable partner to the Pacific and our region, despite the global reduction in development assistance. 

The full impact of dramatic aid reductions around the world is only just starting to be felt. 

Australia is responding to this challenge by reprioritising our development investments to bolster support to our region. 

We now dedicate 75 cents of every Australian development dollar to the Indo-Pacific. 

We are prioritising targeted, high-impact investments that build resilience and back local solutions, making the region more secure and stable. 

We also prioritise those in the most need – such as our role as a leading contributor to humanitarian crises and displaced Rohingyas in Myanmar and Bangladesh. 

This week I will travel to India, one of our most consequential partners in building our collective security and prosperity. I am told this will be my 26th meeting with External Affairs Minister Jaishankar. 

Australia has sought to redefine our relationships with our region. Listening, not imposing. Consulting, not controlling. 

And through identifying shared challenges, designing solutions together, and using all of our arms of national power, we have found ways to build common ground. 

Senator the Hon Penny Wong is the Australian Minister for Foreign Affairs. This is an excerpt of her speech to the 17 November 2025 AIIA Gala Dinner. Full versions of conference speeches, including the minister’s speech, are available here.

Australian Outlook occasionally publishes pieces by figures representing government or other bodies. As with all pieces published by Outlook, these are edited and checked for facts. They do not, however, represent the view of Outlook or the Australian Institute of International Affairs.

This article is published under Creative Commons License and may be republished with attribution.

To say that Australia is not well positioned for this world is an understatement. It’s lonelier and more fraught for us – as demonstrated by both our key strategic partner and our key economic partner having engaged in economic coercion against us. 

The world Australia faces is increasingly undemocratic, grievance-driven, aggressively interventionist and multipolar.

Our fear of abandonment, as Allan Gyngell described so well, has never been more palpable.

Adam Posen describes it as the US having switched from global insurer to extractor of profit, having ripped up the post WWII insurance contract of underwriting global public goods. The most impacted are allies, like Australia, who bought into the system and were freed up to spend less on securing their future.[i]

Our desire for a strategic equilibrium in the Indo-Pacific would seem to no longer be achievable. Indeed, we are now in a state of strategic disequilibrium that will be the norm for some time.

Our bilateral policy framework of ‘stabilisation’ also seems precarious as Beijing undoubtedly will seek to test what it has called our ‘two-faced’ policy as we juggle our economic and strategic interests. We should be under no illusion that China will act in anything but its own interest and that it will be ruthless in doing so. At the same time, it is not in our economic interest, nor our region’s, that China’s economic rise be contained, even if it could be.

So, in this world of great power politics, can Australia maintain a degree of agency?  

In my view, yes, but suggesting we can have complete strategic independence is an illusion. That said, we must come to terms on how to construct and use our agency to prepare for greater strategic autonomy. 

However, our public and indeed private strategic discourse on the US remains narrow, binary and circular – focussed on the centrality of the alliance and AUKUS as our strategic saviour rather than framing it as a national endeavour with huge upside for industrial transformation of parts of our economy.

Little attention is given to understanding the longer-term implications for Australia of the internal dynamics of the US. As this audience knows well, conservatism and isolationism run deep in American history and the national psyche – from the ‘Know-Nothings’ anti-immigration party of the 1800s to the America First Committee of the 1940s.

We have seen a weaker version of US style anti-elitism playing out in Australia with the culture wars against our universities, migration, and diversity and inclusion. While this may be satisfying to some, it’s an indulgence that detracts from the efforts needed to respond to the external threats and position us for the future.

Respondents to public polling by the Lowy Institute reflects the contradictions of our national circumstances.[ii]  Trust in the US has fallen dramatically and has been falling for the past 15 years.  Yet a large majority of Australians still regard the alliance as central to our security and think the US will come to our defence if we are attacked.

Australians are cautious towards China and divided on our economic engagement, despite China having fuelled our growth and rising living standards over the last quarter of a century. Most think China could be a military threat in the next two decades, with half supporting an increase in defence spending, without identifying how it will be paid for.

More than half of the respondents assume China will be the most powerful country in a decade and lead technologically compared to the US.  And most would prefer goods to be made in Australia even if it costs more, even though our services sector is 80 per cent of our GDP.

To exercise our agency, as a nation we need a mindset shift – to think differently about our interests and place in the world. A new global landscape is taking shape. Yet relative to Europe and others in our region, it is striking how slow we are in preparing for a new paradigm.

As I said, we need to be hedging by planning for greater strategic autonomy, as distinct from strategic independence.

Let me be clear, this does not mean turning away from the US. But it does mean inoculating ourselves by taking out a more comprehensive insurance policy than in the past, meaning more self-reliance, more defence spending and sovereign defence capability, and more hedging of our interests through new coalitions and partnerships, whilst continuing to support regional partnerships.

As I have said in this forum previously, what we do at home to build our resilience and competitiveness should be just as important as how we plan for the defence of our nation. We must get our economic house in order, and quickly. If we don’t, we significantly limit our strategic flexibility.

We are not without agency. Australia’s stable political system, Westminster system of government, our proximity to and enmeshment in the fastest growing region of the world, a sound financial sector and macroeconomic frameworks, including a flexible exchange rate, has enabled the economy over several decades to adjust to crises.

And we have been effective in leveraging our geography in our defence and intelligence relationship with the US, even though most Australians would not know this.

But for too long we have underinvested in the foundational elements of our nation that are required to better position us for a new world – whether it be sovereign science and technology capability, a diplomatic footprint that reflects our global interests, defence spending that reflects our strategic circumstances, an industry policy that enables future growth rather than protecting the past, a migration policy that truly focuses on bringing in the best and brightest, or a concerted rather than piecemeal strategy that positions us for sustained major power competition in the Indo-Pacific.

On this last point, despite the naysayers, the current Government deserves credit for its approach to date.

This aside, over the years we have been incremental and ad hoc in our approach to economic reform, too reliant on China to fund our rising incomes, and too sanguine about the security umbrella of the United States to protect us.  Taken together we have become a complacent country, without a comprehensive insurance policy in the face of unprecedented global transformation.   

We are yet to move the dial on productivity growth – our performance is now the second lowest in the OECD.  This is not new – our productivity performance has declined consistently over the last few decades. The recently convened Economic Roundtable by the government clearly recognised this, but just how much political will exists for comprehensive reform remains to be seen.  

Self-insuring will require greater sovereign capability. But getting the balance right on industry policy will not be easier given our history of protecting declining industries and our fragmented innovation system.  

In the Intelligence Review, Richard [Maude] and I said structural changes were needed in the Australian bureaucracy to enable government to better balance multiple interdependent economic and national security objectives. This change was needed because of the inevitable fiscal and societal trade-offs we face in ensuring our economic and national security.

That is why we recommended Treasury play a broader and deeper role in advising on economic security decision-making that, pleasingly, the Government is pursuing.  Treasury is the only agency that can bring broad and integrated economic perspectives and decision-making frameworks to ensure advice to government now, and into the future, encompasses all relevant national interests.

Because having multiple and loosely-defined goals – whether to create manufacturing jobs, build national capacity, promote national security, or accelerate the clean energy transition – will always be a difficult balancing act, but particularly so given our lack of scale and market power.

And as recent calls by some in the political class for a revival of Australian manufacturing show, the political economy concerns of industry policy interventions haven’t changed. This is despite the clear evidence of the past that sound macroeconomic policy along with a policy-driven incentive structure that can mobilise and align private sector capital with national priorities, is what really drives productivity and hence growth in living standards.

Yet, after decades we have yet to move the dial on some of the foundational elements of growth – R&D spending, where we still rank well below the OECD average, and private sector investment, that continues to be weak.

External partnerships like AUKUS Pillar II offer the potential to enhance our advanced technological capabilities but will take time to come to fruition and currently lacks alignment with other initiatives that would create sovereign scale and capability.

In our review, Richard and I also concluded that a bolder approach was needed in the form of the creation of a national security investment fund, along the lines of In-Q-Tel in the US and the National Security Strategic Investment Fund in the UK.

My point here is that we will have to move beyond rhetoric into action, and much faster than our political and bureaucratic decision making currently allows. Our lack of progress on ourmunitions and liquid fuel stocks is a case in point. And while the landmark agreement on rare earths between Australia and the US represents a political watershed in the bilateral relationship, as someone who was involved in the early stages of our critical mineral’s strategy, it has taken us, and the US, way too long to get to this point.

Perhaps nothing best illustrates our propensity to underinvest in our future than in our approach to our understanding of the Indo-Pacific. As recent research has shown, enrolments in Asian languages are at their lowest levels in decades. Our take up of second language learning is amongst the lowest in the developed world.[iii] We seem unconcerned that China studies in Australia have gone backwards, not helped by some who don’t seem to accept that furthering our understanding of China does not mean agreeing with its ideology, governance model or policies.

If we had pursued that approach in decades past with the Soviet Union, we might never have had George Kennan writing as `Mr X’ in Foreign Affairs in 1947. And without the knowledge of Kennan and others, the Cold War could have played out very differently.

Dr Heather Smith PSM FAIIA is the National President of the Australian Institute of International Affairs. This is an excerpt of her speech to the 17 November 2025 AIIA Gala Dinner. Full versions of conference speeches, including Dr Smith’s speech, are available here.

[i] Adam S. Posen, The New Economic Geography, Foreign Affairs, August 19, 2025.

[ii] Ryan Neelam, Lowy Institute Poll Report, June 6, 2025.

[iii] Philipp Ivanov, The Renewed Case for Asian Literacy, Asia-Pacific Development, Diplomacy and Defence Dialogue, 25 September 2025.

Ladies and gentlemen, excellencies, fellows, members, distinguished guests, colleagues, friends, 

Welcome to the AIIA National Conference 2025. 

Those of you who have been with us over the years probably understand that I felt a certain temptation when preparing these remarks. As I sat down to write the opening to this conference, the phrase that sprung–almost unbidden–to mind is:  

“Here we go again.” 

Because indeed, here we go again. 

In previous years we have gathered to consider themes such as Facing Fragmentation and Navigating the Polycrisis. Each time, the message has been unsettlingly similar: the global systems upon which Australia’s security and prosperity depend are under strain. 

But this year–this year feels different. 

The arrival of a second Trump administration has ushered in a set of dynamics that are more pointed, more chaotic, and more consequential than before. We are witnessing a  dismantling of global trade norms, a loosening of U.S. commitments to multilateral systems, and a hesitancy–sometimes an outright ambivalence–toward supporting Ukraine, which continues to fight not only for its own survival, but for the core principles of sovereignty and territorial integrity that underpin global order. 

At the same time, the administration’s embrace—both domestically and internationally—of what can only be described as a politics of grievance is reshaping conversations about alliances, values, and responsibilities. 

These are not simply shifts in tone. They are arguably shifts in order, and they demand that we think more seriously than ever before about what global order means, what it will become, and how Australia might both adapt to and influence the systems now emerging. 

This is the heart of our theme this year: “A World Disrupted: Australia and Global Reordering.” 

Because we find ourselves not just observing disruption … 
we are living within it. 

Most imaginings of the future assume a world that is smaller, harder, bleaker. A world of competing blocs, contested norms, and diminishing cooperation. 

And yet—there are voices who see not only peril, but possibility. 

One of them is the U.S.-based scholar Amitav Acharya, who suggests that a more multipolar, more fragmented system is not inherently negative—particularly for middle and smaller powers. He reminds us that smaller states have always contributed to the construction of global norms and rules. In his view, fragmentation may open new space for creativity, agency, and coalition-building among states that are not great powers. 

Similarly, Singaporean diplomat Bilahari Kausikan argues that Southeast Asian nations are well accustomed to dealing with an America that is sometimes unreliable. For him, Trump does not represent chaos, but what might be called an “overt continuity of unreliability”—merely a more visible form of dynamics the region has long managed. And, he suggests, Europeans—who he characterises as treating NATO as a kind of geopolitical crutch—could learn from Southeast Asia’s more flexible approach. 

Australia, too, might learn something here, particularly as we once again commit ourselves to the elusive but essential goal of improving our Asia capability. 

There is also an alternate view—one less optimistic about global order but perhaps more sanguine from a narrowly national perspective. 

This view suggests that while the erosion of order is damaging globally, Australia might, in fact, ride out the disruption reasonably well. I’ve written in Australian Outlook that Donald Trump does not spend much time thinking about Australia. That reality—however one interprets it—does leave space for the dense network of mechanisms, bureaucratic relationships, military cooperation platforms, and people-to-people ties that make up the Australia–U.S. alliance to continue functioning beneath the political surface. 

And of course China remains a central factor. U.S.–China competition continues to harden, yet China’s own relationships, economic headwinds, and ambitions are also shifting. What emerges from this will profoundly shape the contours of any new order. For Australia, managing this complex triangle—our largest trading partner, our principal strategic ally, and our own national interests—will remain one of the defining tasks of our foreign policy. 

On Order

So what do we mean when we talk about order? 

Order is not only the absence of chaos. It is the presence of predictability, institutions, norms, and—crucially—trust. For seven decades, Australia benefited profoundly from a system largely built and underwritten by the United States. 

But the emerging landscape will not look like the post-war order. 
 

Nor like the unipolar moment. 
 

Nor even like the first Trump presidency. 

We are in a phase where the foundations themselves are unsettled. We are not merely adjusting to new rules; we are watching the rules being rewritten. 

This raises urgent questions: 

• Who participates in shaping the next order? 

• What values will it reflect? 

• How will middle powers coordinate to prevent a drift into unmanaged rivalry? 

• And how can Australia help ensure that the emerging system is one in which openness, sovereignty, and prosperity can survive? 

These questions will animate our discussions over the next day. 

The Role of the AIIA

Whatever shape the world takes in the years ahead, one thing is certain: 
 

The Australian Institute of International Affairs will be there to help Australians know more, understand more, and engage more in it. 

Some of our branches have existed for over a century. 
 

As a national body, we have operated for 92 years. 
 

We are the only organisation in Australia of our kind that was present for the creation of the Bretton Woods system and the other institutions that shaped the post-war order. 

And yet we are far from relics of that era. 
 

If anything, we are more active than ever. 

• Across Australia, we convene around 200 events every year across every state and territory. 

• Australian Outlook publishes around 500 articles annually, providing timely, accessible analysis to a broad public audience. 

• The Australian Journal of International Affairs has achieved top-quartile ranking in its field—and I will risk immodesty and perhaps the immodesty of the journals wonderful co-editors, Joanne Wallis and Tim LeGrand by saying I believe it is the leading academic journal on international affairs in this region. 

• Our staff and members bring Australian perspectives to the world, presenting at conferences in Italy, Germany, Indonesia, the Czech Republic, and beyond. 

• Next year, we have been invited to participate in the Munich Security Conference, a testament to the respect the AIIA now commands internationally. 

I am also pleased to confirm today that we will be moving ahead with the third cohort of the Indo-Pacific Cooperation Network. This initiative—developed by the AIIA in partnership with the Japan Foundation—is a unique, fully funded, cross-national platform that brings together emerging leaders from across our region. In both 2023 and 2024, we selected 15 outstanding participants each year from more than a dozen Indo-Pacific countries, and together they examined disaster resilience policies and initiatives through study tours in Japan, Australia, Fiji, Tonga, and New Zealand. It has been one of our most ambitious and impactful programs, and I am delighted to announce that applications for the next cohort will open soon for what has truly become a premium project in regional engagement. 

And if the pace seems relentless … well, that is because it is. 

On Tuesday—that is, tomorrow—our indefatigable Projects and Publications Manager, Emily Mosley, boards a plane to Jakarta. I will follow her on Wednesday, and together we will run a major Track 1.5 dialogue between Australia and Indonesia—a crucial platform at a time when regional understanding has never been more important. 

After that, before Christmas, AIIA National Office and Events Coordinator Hebe Ren and I will travel to Adelaide, Brisbane, and Perth to deliver events with our valuable partners at the German Embassy and the Konrad Adenauer Stiftung. 

And while I will formally acknowledge all our sponsors at the end of the conference, I do want to take a moment now to recognise the longstanding support of our good friends at KAS, led by their inspiring new Australia, New Zealand, and Pacific Director, Sabina Woelkner. 

Closing the opening

So, as we open this year’s National Conference, I encourage you to approach our theme—A World Disrupted—not only with concern, but with curiosity. Not only with caution, but with creativity. Not only with awareness of the challenges, but with confidence in Australia’s ability to shape, influence, and navigate the emerging order. 

The world is being reordered. 

The question for us is not whether this will happen—but how we choose to engage. 

Thank you for being part of that engagement. 

Thank you for being part of the Australian Institute of International Affairs. 

And with that—let’s begin. 

Dr Bryce Wakefield is the Chief Executive Officer of the Australian Institute of International Affairs

Allan Gyngell wrote in Fear of Abandonment that Australian foreign policy since WWII has been based on three strands: alliance, regional engagement and rules-based order.

He showed how every government, Coalition and Labor, wove these strands together in different ways. The early years of the Albanese government were no exception. As recently as April 2024, Foreign Minister Penny Wong was framing “what it will take to secure our future” in terms of “alliance, region and rules”, echoing Gyngell’s trinity.

But in his closing chapter, Gyngell warned that in a world “whose largest components are propelling themselves erratically in uncertain directions”, this legacy formula now had to be reconceived.

That reconception is here.

Twice in the past week, Wong has outlined a new formula: region, relationships, rules and resilience. We label it “the four Rs”.

The Minister used this formulation when interviewed on Insiders on Sunday 16 November. The next evening, in her keynote at the AIIA National Conference, she employed the same sequence and built her whole speech around it.

The first hints of a new direction had come earlier, in the Australia in the World 2025 Snapshot, published by DFAT in February, which afforded region, relationships and rules respective chapters. Resilience was invoked throughout in relation to cyber, climate and economics.

Wong’s AIIA speech makes the emerging doctrine explicit, turning the Snapshot’s broader departmental treatment into a sharper ministerial statement.

What does each “R” mean?  The first is “region”. Wong argued the Indo-Pacific is “where the world’s future is most being shaped” and “where we have the most on the line”.

The region is where Australia’s exposure and influence are both highest, justifying its listing first in the new formulation. As Wong put it, “it pays to look at a map” to understand the architecture Australia is building.

She described a regional strategy centred on Southeast Asia and the Pacific, investing in connectivity and development, and seeking a “region in balance, where sovereignty is respected”. The region is where events can most quickly harm Australia, but also where our choices can still shape outcomes.

Second is “relationships”. Note the clear departure with the alliance no longer getting its own category. Instead, the United States appears alongside China, Japan, India, ASEAN, Pacific Island countries and others in a wider web of ties.

Wong emphasised the building of an “architecture” of treaties and upgraded partnerships that create shared capacity and common ground. The logic of broadening and deepening ties with a wider range of partners is that security and prosperity never hinge on a single relationship, including with the US or China.

She described this as “amplified middle power diplomacy – pursuing new alignments to better pursue our national interests”. She offered examples of working with the UK, Canada and France on Palestinian recognition, or with Jordan and Indonesia on Gaza humanitarian assistance.

The approach extends beyond traditional allies. Wong highlighted unprecedented cooperation with India, Japan and South Korea. Even the stabilisation with China fits this framework – engagement without concession and maintaining dialogue at every level, including military channels.

The third R is “rules”. Wong was frank that “longstanding institutions and rules are [being] undermined and broken”, citing Russia’s invasion of Ukraine as exhibit A. Yet rules still matter, especially for a middle power. International law and institutions set expectations for behaviour and provide “organising principles for cooperation”.

Wong went further, arguing rules are “not merely a defensive interest” but “a vital avenue for Australia to prosecute what matters to us”. Rules don’t just help keep Australia safe; they offer “an avenue to promote and persuade”.

The fourth R is “resilience”. This is the most striking addition, because it brings domestic policy squarely into the heart of foreign affairs.

Wong emphasised the health of Australia’s democracy and trust in institutions, and a strong and diversified economy, as key pillars of resilience.

In the speech the Minister linked resilience directly to deterrence. A cohesive society, trusted institutions and robust defences against foreign interference make Australia a harder target and “raise the costs” for any state that might try to coerce it.

In setting out the four Rs with such clarity, Wong’s speech delivers the strategic coherence that some argued the Snapshot stopped short of providing.

The past year has marked a turning point for Australian foreign policy, driven by a rapidly changing strategic environment. Above all, President Trump’s return to office has reshaped the context in which Australia must navigate its place in the world.

While Australia has to date managed relations with the Trump administration effectively, the trajectory of US foreign policy makes keeping the alliance on its own as one of three foreign policy pillars, as in the old formulation, simply untenable.

Yes, the alliance remains vital. In her AIIA speech Wong went out of her way to stress the continuing value of US power, presence and engagement. But rather than framing the alliance as a foundational pillar on which everything else rests, the speech embedded the alliance within a wider logic of diversified relationships, regional priorities, and national resilience.

It is not that the alliance has receded in importance. Regional relationships have simply become equally important.

Australia now faces a world of heightened uncertainty and increasingly concentrated risks. Supply chains can be weaponised. Information systems can be hacked. Markets and militaries move faster than diplomacy. In this context, foreign policy becomes a form of risk management, reducing exposure where possible and preserving room to move when shocks arrive.

Seen this way, the four Rs become mutually reinforcing risk management tools. “Region” lowers the chance of dangerous escalation by working to keep the neighbourhood in balance. “Relationships” build multiple channels for cooperation and crisis management, so Australia is never left facing a problem alone. “Rules” provide shared expectations and forums that can constrain power and organise collective responses. And “resilience” means Australia and its partners can withstand pressure and keep making sovereign choices.

These principles cannot guarantee safety or certainty, but they offer a strategy to live with uncertainty rather than ignore it. They can help ensure that when pressure comes, Australia still has real choices about how to respond.

Gyngell always said that effective foreign policy ensures that no matter how international developments unfold, Australia will always have options to act.

The four Rs look to carve out that space in a more dangerous and fluid era. Allan would surely have approved.

Dr Darren Lim is a senior lecturer at the Australian National University and is the host of the Australia in the World podcast. Hannah Nelson is a student and researcher at the Australian National University and researcher and editor for the Australia in the World podcast.

This article is published under a Creative Commons license and may be republished with attribution.

Photo Credit: Dean Calma / IAEA