A Navy Landing Craft, Air Cushion from amphibious transport dock USS San Diego enters the well dock of Australia's HMAS Canberra off the coast of Hawaii during Rim of the Pacific drills in July. A new report suggests that expanding amphibious exercises between America and Australia is one of several ways to strengthen the alliance and enhance the U.S. policy of rebalancing to the Pacific. (Yuri Ramsey/Royal Australian Navy)

One of the top risks to the U.S.-Australia alliance is an emerging “Chinese wedge,” in which Canberra would be forced to juggle its economic ties with China and defense bond with America, potentially undermining its foreign policy, according to an Australian think tank’s report.

“Against Complacency: Risks and Opportunities for the Australia-US Alliance,” issued this week by the United States Centre in Sydney, advocates a dozen measures to strengthen the alliance.

Among the military-related recommendations are homeporting Navy vessels in Australia, expanding amphibious exercises, boosting cooperation in space and energizing Australia-Japan and U.S.-New Zealand ties.

Australia has been boosting its military strength and regional involvement and tightening its “web” of security ties with America and regional partners, says the report authored by Richard Fontaine, president of the Center for New American Security. Fontaine spent four months in Australia this year as the inaugural fellow for the Alliance 21 Fellowship, which was launched by the U.S. government.

The country shares America’s commitment to a rules-based order that has benefited the two allies.

“The result is that Australia may today figure more prominently in the thinking of American policymakers than at any time since the Second World War,” the report said. “The Australia-US alliance is deeper, closer and healthier than ever before, and it is newly relevant to the region in which both countries discern their most vital future.”

But that shouldn’t lead to complacency, the report contends, particularly with China, the rising superpower in the Pacific.

Australia’s economic ties to China are stark: a third of its exports go to China, a higher percentage than any other G20 country, and China buys half of its exported iron ore from the country, the report said. Chinese investment and tourism in Australia is on the rise, which includes about 50,000 Chinese students studying there under the so-called “education export.”

Complicating the relationship is China’s routine “punishment” of perceived offenses by trading partners through economic penalties.

The report considers three scenarios in which a China wedge might emerge in U.S.-Australia ties.

The first has Australia acting in concert with American goals that would anger Beijing. This wedge is already materializing over China’s claims to a vast swathe of the South China Sea.

Canberra has called on China to abide by this year’s decision from the Permanent Court of Arbitration in The Hague that determined China’s claims of sovereignty in the sea were not valid.

A Chinese foreign policy spokesman said China was “shocked” by Australia’s “wrong remarks.” China’s state-operated Global Times newspaper warned that if Australia joined the U.S. in freedom-of-navigation patrols in the sea, Australia “will be an ideal target for China to warn and strike.”

China has also criticized Australia’s warm reception to the Pentagon’s interest in rotating new bombers and tankers through the country’s air bases, which already have hosted nuclear-capable B-2 and B-52 bombers, the report said.

A second scenario could arise from policy or operational disagreements between America and Australia. For example, Washington was displeased with Canberra’s decision to grant a Chinese company a 99-year lease to the port of Darwin, near the site through which U.S. Marines have been rotating.

Repercussions from a greater issue, such as the possibility of one day imposing economic sanctions against China for its actions in the South China Sea, could “split” the allies “in damaging ways,” the report said.

A third possible wedge could arise if an actual armed conflict arose between America and China.

“In this, Australia would be required to choose sides,” the report said. “If Washington at that point called on Australian support, whether maritime or even intelligence in nature, Canberra would face an unavoidable choice between the United States and China.”

The next presidential administration should build on the already-firm foundation of the U.S.-Australia military alliance, the report recommended.

First, the two countries should move forward from the several years of discussions about expanded access for Navy vessels in Australia and actually start doing so.

The Royal Australian Navy’s primary base, HMAS Stirling, near Perth, “offers direct access to the Indian Ocean, an extensive offshore exercise area, submarine facilities and docking for surface vessels,” the report said.

“Basing US vessels at Stirling would require significant investments, but the two governments should be ambitious in examining the possibilities, including planning for forward basing an aircraft carrier strike group in Perth,” the report said. “With the US Navy currently porting its Seventh Fleet in Japan, a second carrier strike group required in the region would likely come from the west coast of the US — and consume precious days in steaming there.”

Expanding amphibious exercises “can represent a meaningful contribution to the regional stability on which Australia’s security and economic interests depend,” the report said.

Australia is in the process of acquiring new amphibious capabilities that will enable the Australian army to conduct “full spectrum, expeditionary operations,” procurement that is parallel with Japan’s development of its own capabilities, the report said.

The three nations should step up trilateral amphibious exercises to ensure smooth integration.

The U.S. at one time had seven separate deep-space tracking stations in Australia; it now has only one. “The two governments should take a fresh look at bilateral ways to develop new commercial space opportunities and scientific expertise in both countries,” the report said.

Despite an announcement by Australia and Japan in 2014 of a “special strategic partnership,” Tokyo was stunned when its Australian partner chose to buy submarines from France instead of Japan.

The report suggests that Washington can play the role of “marriage counsellor” by encouraging both nations to maintain forward momentum, despite the submarine setback.

With its own special relationship with Australia, New Zealand is growing more confident in its international role, with “a military engaged in operations as far afield as the Gulf of Aden and [East Timor],” the report said.

At the same time, a 30-year rift between the U.S. and New Zealand is coming to an end with the visit of a Navy warship there in November.

A 1984 New Zealand law banned warships carrying nuclear weapons from visiting the country, and because the Navy does not publicly announce specific weaponry, all of its warships were essentially barred entry. The U.S. declared a reciprocal ban on New Zealand warships, which was lifted in 2014.

“Banishing the anachronistic nuclear divide is the first step in an enhanced US-New Zealand partnership in which Australia could play a key role,” the report said.

olson.wyatt@stripes.com Twitter: @WyattWOlson