The Australia-U.S. alliance has experienced three straight decades of tightening and deepening, driven by a range of factors. The advent of the "unipolar moment" provided a strong incentive for Australia to make a sustained diplomatic effort to reinforce and renovate its alliance with the United States after the Cold War, rather than to attenuate it as Thailand and the Philippines did. The tech-driven surge in the U.S. economy, coupled with the revolution in military affairs, convinced successive Australian governments that the United States was an indispensable security partner for the foreseeable future. Regional and global security dynamics further drove a convergence in strategic interests. Post-Tiananmen China had stabilized Communist rule and inaugurated a sustained period of economic growth through the 1990s. Its insistence on the retrocession of Hong Kong and Macao and its "missile diplomacy" against Taiwan in 1996 underlined for many the arrival of a wealthy and assertive power in Asia. And by the end of the 1990s, the region's strategy of socializing China through regional organizations had clearly not worked. The September 11 attacks, followed by the Bali bombings on Australia's doorstep, focused Australian and U.S. concerns on terrorism and weak states for the decade that followed. Australia's strong support for U.S.-led campaigns in Central Asia and the Middle East, and its willingness to contribute to the controversial invasion of Iraq, provided ample opportunities to co-embed Australian and U.S. forces, integrate intelligence cooperation to unprecedented levels, and press forward with a range of interoperability initiatives. The alliance gained an economic pillar with the signing of a free trade agreement in 2005. The following discussion examines the challenges to the Australia-U.S. alliance that have emerged over the last decade. The essay then assesses Australia's strategic options and concludes by arguing that the allies need to develop a common strategy to balance China's rise.