Is the spectacular growth of Sino-Australian trade compelling Australian policy-makers to strengthen strategic support for China in the face of traditional alliances? The recently signed trade agreement under which Australia will annually export 20,000 tonnes ofuranium to China for power generation for the next 20 years, will feed China’s increased energy demand, allow a reduction in dependence on coal-based energy and ameliorate environmental deterioration, all matters that have become critical to China’s economic growth. Yet the uranium trade will contribute only slightly to China’s energy needs, and to the Australian economy. However, the trade deal was signed even though China, as a nuclear military power, is a potential threat to Australia’s strongest military ally, the US. At the same time it reignited a divisive debate in Australia, covering a wide range of political, social, economic, health and environmental policy areas that reach well beyond strategic relationships. That the Australian Government will risk both internal and external criticism seems to be further recognition that Australia is becoming increasingly dependent on the continued growth of China’s economy for its prosperity.