Australian Prime Minister Julia Gillard announced a sweeping inquiry into the implications of Asia's growing clout Wednesday, warning it was an issue with significant rewards and risks.
Mining-powered Australia is enjoying unprecedented wealth due to surging demand for its iron ore and coal from China and India, two nations Gillard noted had almost tripled their share of the global economy in just 20 years.
"For our nation and our people, the implications of this Asian century are profound," she told an Asian business lunch.
"The challenges for Australia are significant, the structural adjustments forced on us are real," she added. "The economic opportunities are enormous as well."
Former Treasury chief Ken Henry will chair the "white paper" review -- a strategic blueprint for the government -- titled "Australia in the Asian Century".
The inquiry is tasked with examining the strategic, environmental and social impacts of the Asian region's boom.
Gillard singled out food security, foreign investment, stock market structures and financial regulation, immigration, education and energy policy and environmental standards as some of the areas for discussion.
"There isn't a single aspect of government policies and national planning that won't be touched by the great changes to come," she said.
China is now Australia's biggest trading partner and export market but it is not a relationship without risk, Gillard added, describing the Asian giant as "neither a democracy nor part of our alliance system."
Australia's strong ties with the United States put it in a sometimes tense position in the region, but Gillard said she was "confident" of a strong future with "an ally in Washington and respect in Beijing."
"There is nothing in our alliance relationship with the United States which seeks to contain China, because a growing, successful China is in the interest of every country in the region," she said.
The white paper will examine pressing challenges for the next five years and preparing Australia for the next 15, a period in which Gillard said Asia's booming middle class was expected to drive further profound economic shifts.
It will not look into national security or military challenges because a new defence white paper is due in 2014, and Gillard said Australia was "not on a quest for more regional or indeed global architecture".
"Our challenge is to ensure new institutions like the G20 and the East Asia Summit have growing meaning and purpose," she said.
Henry will report back early next year following consultations with the business, academic and broader community and Australia's international partners. The paper will be made public in mid-2012.