Australia’s current relations with China seriously challenge two very popular grand strategic assumptions that are frequently referred to by Chinese interlocutors. The first challenged assumption is that the more another state trade with China, the more its economic and non-economic policies will or should become aligned with those of China or risk Chinese economic retaliation. The second is that allies of the United States in Asia adopt policies opposed by China due solely or primarily to pressure from the United States. Australia is very trade-dependent on China and yet frequently adopts non-economic policies opposed by China. Australia is a very close ally of the United States yet on key policy areas from Chinese firms’ participation in Australia’s critical infrastructure to defence cooperation with China, alliance interests have not predominated.   China and the U.S. are less influential over Australia’s definition of its national interest and the policies it pursues than conventional wisdom suggests.