Australia’s relationship with China is one of its most difficult and challenging: it constitutes a crucial test of the success of Australia’s ability to engage with the region in a way which gives full expression to its energy, initiative and unique identity. While relations have continued to be both cordial and mutually beneficial, and have matured considerably, two major developments in the post–Cold War era are likely to have an enduring impact on their long-term stability. At the international level, the end of ideological confrontation between the superpowers, and of the alliance system that buttressed it, refocused the political and economic attention of both China and Australia at the regional level. At that level, the most significant development, the emergence of China as a dominant economic and military power within a region that was itself shaping up as a financial and commercial powerhouse, opened up new windows of opportunity for Australia, while at the same time highlighting asymmetries in power between China and Australia, which had hitherto been disguised by a confluence of circumstances.