Australia’s economic and political engagement with the self-governed island of Taiwan has been constrained by inconsistent and tentative policy under diplomatic pressure from Beijing. Economically, Australian interests have been hurt by China’s so-far successful effort to stop Canberra pursuing a free trade agreement with Taipei. Politically, Australia has contributed to Taipei’s international isolation by not more fully taking advantage of the freedom to manoeuvre granted by the ambiguities of its one-China policy. If left unchecked, this deepening international isolation could eventually endanger both Taiwan’s de facto independence and its liberal democracy.

The Taiwan strategy advocated in this paper is likely to be a complicating factor for Australia’s relations with China. However, Beijing’s pursuit of a normalisation of diplomatic and trade ties with Canberra, the consistency of these recommendations with Australia’s one-China policy, its overlap with positions taken by Australia’s allies and partners, and the already fraught nature of Australia–China ties across a wide range of policy arenas, mean this Taiwan strategy is unlikely to significantly further disrupt relations with China. To manage Chinese government concerns, this Taiwan strategy can be combined with reassurances to Beijing that Canberra continues to adhere to its one-China policy and does not support Taiwanese independence.