Australia is a thinly inhabited continent (23 million people inhabiting a continent roughly the size of the 48 states). China is somewhat larger in size (3.8 million square miles vs. 3.0 million for Australia), but its population is over 60 times greater (1.4 billion). Most of Australia's population is of European origin, primarily British or Irish ancestry, and are more alien to the Asia-Pacific region than are the Chinese. China desperately needs Lebenstraum. With the probable decline of American military power in the next few decades due to our nation's decadence, China will fill the power void. The Russians would not discourage their neighbors from striking to the south, as it would keep them from eying Siberia or Central Asia for expansion.
Were I an Australian, especially in the equivalents to the State and Defense Departments, my country's strategic problems would keep me awake at night.
“China desperately needs Lebenstraum.”
China does not need more “Lebensraum”. China needs energy resources and the South Chinese Sea could exactly provide this.