SYDNEY - THE dawn of the Asia-Pacific century holds both economic opportunities and potential security concerns for Australia, Prime Minister Kevin Rudd told parliament on Thursday.
The government wanted to expand its security links with China and India as well as regional partners including Japan, South Korea, Indonesia, Malaysia and Singapore, Mr Rudd said.
'While the likelihood of conflict between the major powers is currently low, their interactions still largely shape the international order in which Australia must operate,' Mr Rudd said.
Presenting the first in a regular series of national security statements, Mr Rudd also announced the appointment of former Special Forces commander Duncan Lewis to the new post of national security adviser.
Mr Rudd said the future stability of the Asia-Pacific region would rely largely on the continuing strong presence of Australia's closest ally, the United States.
'The most crucial relationship, in East Asia and globally, will be between the United States and China,' he said.
'For Australia, the relationships between China, the US and Japan will affect our security and our economy, given the importance to us of our relationships with each of these nations.'
The rise of India would also be an important new factor in the strategic stability of the Asia-Pacific region.
'India will need to respond to the growing threats of domestic terrorism and manage its relationship with Pakistan,' he said.
South-east Asia would be of great national security interest to Australia because its geographic proximity and continuing political and economic change.
'This diverse range of countries will, over the long term, experience continued economic growth, development and improving governance.
'But a number (of countries) will also be faced by ongoing challenges of terrorism, insurgency and communal violence,' he said.
National security policy would be built on an activist diplomatic strategy, a defence force ready to respond when necessary and on building and maintaining national security agencies, Mr Rudd said.
He announced that the customs department would be reorganised to deal with border security and the problems of people smuggling under the new title Australian Customs and Border Protection Service. -- AFP