As our largest two-way trading partner Australia is heavily invested in cooperation with China. However, Australia-China relations are being strained as China pivots away from using soft power to press its point towards threats of economic coercion, imposing trade tariffs and export bans on Australian exports. Foreign policy and trade disputes can have flow-on effects for Defence. For example, Australia supporting an independent investigations into the origins of COVID-19 can spark a dispute that goes beyond both borders and culminate in naval altercations in the South China Sea - be it with us or an ally. The same is true for other nations like India who recently experienced clashes with Chinese forces in the Himalayas. The result was a mutual build-up of troops and further confrontations along the Chinese-Indian border. Volatile times call for diplomatic measures and diversification of trade sources and that's were the national security dialogue known as the 'Quad' comes into being and Defence's contribution to that via its joint military exercises such as AUSINDEX and Malaba.