There are posts in several threads about this so thought it would be easier for a single thread since this might heat up soon.
Someone is going to have to give. China is pressing ahead with the idea that it is their sovereign territory while the US is claiming freedom of navigation still holds.
The wiki article
Personally I think that Australia should either
A) Back off and let the US deal with it
B) Obtain a nuclear deterrence (has implications for other nations obtaining nuclear weapons)
The reason for choosing A or B is the same, as we see in the Ukraine, Syria and previously in Georgia the US will not (nor should it) risk war between two nuclear armed states for a small ally.
I read an article about how the large Australia policy would allow a large enough tax base to properly defence the continent. I cant find it but here are some relevant articles
lowyinterpreter.org/post/201 … fence.aspx
afr.com/news/policy/defence/ … 226-gn4bw0