A single question has dominated the Australian foreign policy debate for more than a decade: If push comes to shove between its military bulwark, the United States, and its economic benefactor, China, whose side will it take? Last week’s announcement that the government in Canberra will increase military spending to 2% of gross domestic product within a decade suggests its allegiances remain firmly with Washington.

While this is true to a large extent, the newly outlined commitments seem to be less a definitive victory for Washington over Beijing than a response to Australia’s own political and strategic realities.

The decision is also less about choosing between Australia’s military and economic security—or its history and geography as former leader John Howard once put it—than it is about responding to the strategic circumstances of the present day and the likely environment they will produce in the future. While supporters of the American cause in the Asia-Pacific may celebrate a stronger regional ally, a pragmatic and responsive approach of this kind is naturally also subject to future change.

Australian Prime Minister Malcolm Turnbull spoke of adopting a “clear-eyed and unsentimental appraisal of our strategic environment” when unveiling the new funding level, as part of a long-awaited defense white paper. This document outlines an increase in Australia’s annual military spending from $23 billion to $42 billion by 2025. Within this, there is a particular focus on modernizing the country’s navy through the addition of 12 new submarines, 12 patrol vessels, and nine frigates.

The report has proven controversial on both the domestic and the international fronts. A previous version leaked to the media contained an earlier time frame for the new submarines to enter service. Former Prime Minister Tony Abbott—suspected by many to be the leaker—used this to criticize Turnbull, who deposed him as leader of the government and the Liberal party last year.

Though the white paper’s identified threats include the transnational terrorism of the so-called Islamic State, it has typically been construed as a response to the growing assertiveness of China in Australia’s wider region. And, indeed, the document’s identification of South China Sea disputes as one of several “points of friction” drew predictable ire from Beijing, with a government spokesperson calling on parties to “cease constant reinforcement of military build-up in the Asia-Pacific.”

Canberra has good reasons to fear such censure: China is by far Australia’s largest trading partner and its appetite for the country’s iron ore, coal, natural gas, and other resources has been key to Australia’s approaching 25 years without recession. This included it being the only traditionally developed economy to avoid a contraction following the 2008 global downturn.

From Beijing’s point of view, these ties are made more tenuous by Australia’s closeness to the US. Chinese leaders have previously been angered by incidents such as Howard backing Washington in a 1996 dispute over Taiwan, and another former leader, Julia Gillard, approving a major US troop deployment to Darwin—strategically located on Asia’s doorstep—in 2011. As recently as May last year, then- Prime Minister Abbott felt it necessary to quickly dispute a US official’s claim that his country would soon be basing B-1 bombers in Australia.

Given this, recent white papers have typically been circumspect in their assessment of regional strategic realities and of Australia’s suggested responses. The 2013 iteration—the last released prior to the new paper—essentially reduced the country’s military objectives to defending its own territory from low-level threats and stabilizing its immediate neighbourhood. The flipside of this more restrained approach is that it typically attracts dissent from Washington, whose leaders place certain expectations on Australia’s commitments to ensuring regional stability, given that the US has essentially guaranteed Australia’s security since World War II.

With this in mind, the 2% of GDP figure is significant for being more in line with tacit, and often explicit, US demands. It corrects a fall in spending to 1.6% of GDP under the Labor government of 2007-2013, which prompted former US Deputy Secretary of State Richard Armitage to claim Australia risked being a “free rider” in the ANZUS alliance, which also incorporates New Zealand.

There are two reasons to conclude that Australia is now responding to local conditions and pursuing its own regional interests, rather than taking sides with Washington or Beijing. Firstly, conservative governments such as those of Turnbull and Abbott have long been friendlier to traditional allies such as the US. Left-leaning administrations, meanwhile, have favored building engagement with Asia. Recent Labor Prime Minister Kevin Rudd, for example, put forth an ultimately unsuccessful proposal for the establishment of an Asia-Pacific community, and contended this would have a pacifying regional effect and include inbuilt dispute resolution mechanisms. While Turnbull is far more of a centrist than previous leaders of his Liberal party, he must still respond to its internal dynamics. His white paper maintained commitments that were set in motion during the more ideologically motivated and hawkish Abbott’s reign.

Turnbull’s hand has also clearly been forced by a far more assertive recent approach from Beijing. As Peter Jennings, Executive Director of the Australian Strategic Policy Institute and an adviser to the white paper process, points out, China had not even begun to construct runways or other instalments on the islands it claims in the South China Sea when the white paper was first mooted in early 2014. The pace and scale of activity—and the fear it has engendered in other countries—has no doubt produced a very different final product than would have otherwise resulted. Moreover, Australia’s own direct interests are now more and more seen as under threat as a result of Beijing’s increased militarized claims, with much of the trade-dependant island nation’s commerce passing though these maritime areas.

Meanwhile, the US has itself shown much more of a tangible commitment to its long discussed “pivot” or “strategic rebalance” to Asia-Pacific during the same space of time, particularly since its game-changing October 2015 freedom of navigation operation through the disputed Spratly Islands. Prior to that maneuver and this year’s agreement on the Trans-Pacific Partnership—considered the financial underpinning of the regional rebalance—with Australia and 10 other nations, there were significant doubts as to whether the superpower still had the capacity to refocus in this manner.

Canberra’s new level of confidence in Washington’s role in the Asia-Pacific is clearly reflected in its new military commitments. Indeed, many senior figures in Australia are now calling for its own warships to travel through waters claimed by China to prove the baseless legality of its “nine-dashed line” claims, and there are indications Australia already dispatched aircraft to the area last year for this purpose.

Finally, China’s continuing economic slowdown could also have played a role in Australia’s new strategic reckoning. The Asian nation’s growing woes have provided a period of unusually high domestic preoccupation, during which time other countries can act against its declared interests without fear of considerable retribution. The downturn has likewise challenged the narrative of China as an unstoppable economic force that will propel Australia forward for decades.