SYNDEY - With China becoming Australia's largest trading partner and being the second largest economy in the world, Australia seems a bit difficult to keep balanced relations with both traditional ties of Washington and the new business partners in Beijing.

Prime Minister Julia Gillard, who assumed office last June to succeed Kevin Rudd, would find managing relations with China difficult because she will have to find a new balance in relations with Washington and Beijing as power shifts in Asia, Hugh White, Professor of Strategic Studies and Head of the Strategic and Defence Studies Center at Australian National University, said recently.

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"She will be keen to maintain good links with China if only for economic reasons, while at the same time she will feel a strong domestic political imperative to support the US in Asia unquestioningly. This will become harder to do over coming years," White told Xinhua in an interview.

White believes Australia has a huge stake in the successful development of a stable new relationship between both Washington and Beijing.

"It is very important to Australia that the US and China build a new relationship which accommodates China's growing power and maintains a strong role in Asia for America, while at the same time avoiding destabilising strategic competition between them," he said.

"It is very important that Gillard should promote and encourage this outcome both in Washington and Beijing. Whether she will have to skill and courage to do so is another question."

Many Australian experts and business leaders said forging a better relation with Beijing is vital to Australia's national interests and economic development even though close ties with the United States is a cornerstone of Canberra's long-term foreign policy since the end of World War Two.

On Sino-US relations, Professor White believed that the new bilateral relationship needs to be built on a recognition by Washington that Beijing's growing power means America can no longer exercise the kind of leadership in Asia which it has exercised for the last four decades.

"Gillard too needs to acknowledge this. That will be hard as Australians are very comfortable with American uncontested leadership in Asia, but Gillard needs to explain to Australians that with China's power growing, the old model of US leadership is no longer sustainable," he said.  

Could Australia be drawn into any strategic competition between the US and China? White said if that occurs, it will depend on the choices Australia makes, and they in turn depend on the circumstances which drive Sino-US strategic competition.

"If China behaves aggressively and starts to use its power to the detriment of others in Asia, including Australia, then Australia would side with the US and others in resisting China' s pressure," he said.  

"But if China shows itself willing to conduct itself responsibly, to accept a continued strong US role in Asia, and to accept and respect the rights and interests of other countries, then Australia might be very reluctant to support the US in trying to maintain primacy in Asia rather than share power with China.  In that case Australia would have a very hard choice to make."

However, Alan Dupont, Director of the Center for International Security Studies at the University of Sydney said it was very difficult to see a situation in which Australia has to choose in such dramatic terms between China and the US, even on an issue like Taiwan.

"On Taiwan issue, I think it's quite unlikely there will be a military confrontation involving the US where Australia would be asked to support the US," Dupont said in an interview.

What would be Australia's position in the triangle relations? White suggested that the Gillard government should speak out that it is vital for the US and China to build a durable peaceful relationship that avoids destabilising strategic competition and reduces the risk of conflict.  

"That new relationship will need to acknowledge the new power relativities between Washington and Beijing. The US will need to learn to work with China as a fully equal partner. China on the other hand will need to accept that the US will remain a major power in Asia  China will need to treat the US as a fully equal partner in Asia over the decades ahead. That will be hard for both countries, but the consequences of competition and conflict between them would be much worse," he said.

This recognizes the fundamental strength of Australia-China ties. Indeed, although China and Australia have different political systems, histories and cultures, they have complimentary interests, White added.

Professor Dupont agreed with White's views, saying it's important for Prime Minister Gillard to "point out all the areas of common interest that increasingly unite Australia and China, from people-to-people links to trade and commercial exchange".