Australia is a middle power caught between rising dependence on China, which seeks a sinocentric region, and growing security reliance on the U.S., which strives for a trans-Pacific community supporting universal values. In light of the Sino-U.S. identity gap and different concepts of regionalism, its response becomes clearer.

The nuclear crisis tested the U.S. in four distinct periods from 2002 to 2007, as slowly its strategy shifted toward multilateralism. After failing to rally any state but Japan to its side, the U.S. approved the Joint Agreement by working more closely with China. With Phase 1 finishing, Phase 2 puts a premium on multilateralism for which the U.S. is unprepared.

Domestic politics combined with strategic repositioning toward the U.S. set back ties between Japan and South Korea in 2004––05. Despite the North Korean nuclear crisis and the challenge of shifting great power relations in Asia, as well as closer economic and cultural bilateral ties, politicized forces are pulling the two countries apart.

The fallout from September 11 continued to recast U.S. relations with both Southeast and Northeast Asia. Alarm over Islamic terrorist groups such as the perpetrators of the Bali disco bombing and development of nuclear weapons by North Korea eclipsed concern with China's relentless rise and Japan's deepening economic morass. The Bush administration looked to the countries of the Association of Southeast Asian Nations (ASEAN) to root out conspiratorial cells, and to South Korea, Japan, China, and Russia to pressure Pyongyang. After Bush branded North Korea as part of the "axis of evil," a conciliatory tone prevailed toward all who could help in containing the nation.