Australia is not an active participant in the South China Sea (SCS) dispute and at first sight its distance from the area may give the impression of irrelevance. However, the dispute has consequences for Australia’s geopolitics in a way that is increasingly being recognized within government and the wider security community. In essence, the notion of geopolitics relates to the impact of geographic location on security and the formulation of policy, and how governments react to and devise policies towards their immediate security environment. The United States (US) may have a very clear understanding on its global geopolitics in terms of preventing one-state dominance of critical regions such as Western Europe or the Asia-Pacific region. However, because of its historical isolation, Australia’s understanding of its geopolitics has been undeveloped, though largely framed in terms of ensuring the security of its northern approaches while maintaining alliance relationships with larger powers as protection. The SCS dispute, however, has had the effect of hastening the development of that understanding of geopolitics in the various debates and discussions about Australia’s security. The SCS dispute involves China, which has been Australia’s major trading partner and contributor to its economic growth over the past decades. However, China’s regional ambitions both in Southeast Asia and the South Pacific have evoked apprehensions. Once a country that had a limited understanding of its immediate external environment, Australia has discovered that it cannot rely on its isolation, or on its alliance relationships alone to deal with this new and increasingly complicated scenario.