This chapter considers some of the significant trends shaping the world and their implications for Australia. Where possible, it looks 10 years out. The Government recognises that often we will be responding to unexpected events. Even so, understanding the forces driving change is essential to navigating uncertainty and influencing events to our advantage.

Australian foreign policy in recent decades has focused on advancing our interests as globalisation deepened and economies in Asia grew strongly. In the decade ahead, both trends will continue profoundly to influence our prosperity and security.

Other major trends will shape our world, including the pace and scale of technological advances, demographic shifts, climate change and new global power balances. The threats posed by North Korea and terrorism and other transnational issues will require resolute, long-term responses.

The United States remains the most powerful country but its long dominance of the international order is being challenged by other powers. A post-Cold War lull in major power rivalry has ended. These trends are converging to create an uncertain outlook for Australia.