Yesterday, Prime Minister Julia Gillard announced a new White Paper on Australia in the Asian Century. I recommend reading Gillard's announcement speech to get a feel for the Government's thinking.

This will be a heavily economics-focused review. As I've discussed before, Gillard seems to see the world of international affairs largely through the lens of economic prosperity, so no surprises that a former Treasury man leads the review.

Strong regional relationships are obviously the foundation of good economic ties, but it's noticeable how little time the PM spent discussing the challenges for our defence and the political obstacles to our foreign policy. In fact, the PM explicitly references a new Defence White paper due in 2014, and ropes the forthcoming paper off from it. The closest to foreign policy thinking is a line that could be seen to rebut Rudd's approach, but one that should please Michael Wesley: 'The terms of reference also reflect my view that we are not on a quest for more regional or indeed global architecture'.

The only mention of Taiwan is as an 'Asian Tiger'. Gillard talks of the need for 'space for a rising China' while keeping the US fully engaged in the region without suggesting what either entails. Indonesia is placed in a series with China and India, but only mentioned for its economic growth and as a 'new power'.

The political challenges of an Asian Century are more explicitly laid out in the terms of reference, and there's no point Gillard setting such homework and then spelling out all the answers she wants. But it's clear this PM (for reasons of personal interest, confidence in Rudd and Smith, or simply because of domestic political need) views international economic policy as the measure of Australia's foreign policy.

Pleasingly, the PM seems to recognise the dual nature of the century's challenge for Australia and Australians:

The task we have set Dr Henry and his team is substantial.

There is the intellectual task of the White Paper itself: fully to comprehend the implications of the Asian century, fully to describe its opportunities and risks.

There is the public task of the process of its development and discussion: to ensure these implications are understood in every part of our nation.

It is this latter challenge that will be hardest of all. The public will happily stump up extra cash for a bigger defence force, but will they accept Australia allying more closely with an Asian power (say Indonesia or India)? If you thought the debate about 'independence' was bad, wait till we are seen to act at the behest of one of our Asian neighbours. Engagement will fail as a concept if it is not adopted by the public as well as the government.

Photo courtesy of the Department of Prime Minister & Cabinet.