Today, Australians view China more positively than they do the US, according to a major survey released this week in Sydney by the prestigious foreign policy think-tank, the Lowy Institute.

While 58 per cent of Australians have "positive feelings" towards the country's traditional ally, America, that figure rises to 69 per cent for China. In fact, only traditional friends and trading partners such as New Zealand, Britain, mainland Europe, Singapore and Japan (84 per cent) rank more highly in Australians' esteem.

This positive view of China is not a statistical quirk. According to the same survey, 51 per cent believe that a free-trade agreement with China would be good for Australia, while only 34 per cent view positively the already completed US-Australia free-trade pact.

And when it comes to the vexed issue of Beijing's attitude towards Taiwan, Australian Foreign Minister Alexander Downer appears to be in tune with public opinion when he said in Beijing last year that the US should not automatically assume Australia would join it in a military defence of Taiwan against any Chinese aggression. A staggering 72 per cent of respondents to the survey agree with Mr Downer's view.

There is little doubt that the lower-than-expected degree of support for the US is, in part, due to the Bush administration's uncompromising and hardline foreign and defence policy stance in the Middle East and North Asia. And there is also little doubt that China is not the bogeyman it is sometimes portrayed as by the US and some Australian business and strategic interests, in the minds of ordinary Australians.

In fact, the growing strength of China is rated last in a list of top 10 threats to global security by the 1,000 Australians interviewed in February for the Lowy Institute.

In the 1960s and even into the 1970s, the majority of Australians, like Americans, regarded China as the "yellow peril"; a secretive country with a desire to spread communism through Asia and even into Australia. But when then Australian prime minister Gough Whitlam moved for Australia to formally recognise China in 1972, a shift in attitudes began.

As the Lowy Institute's executive director, Alan Gyngell, said: "Australians see China as an opportunity, not a threat. The `yellow peril' seems to have dried up." This upbeat view is good news for Australian Prime Minister John Howard, who heads to China this month to launch free-trade discussions between the two.

But Ross Garnaut, a former Australian ambassador to China and a trade expert, last week issued a word of caution about the radiance emanating from the Chinese and Australian diplomatic and trade camps. Professor Garnaut noted that while a free-trade agreement "could end Australia's discrimination against China and China's against Australia, it would increase Australia's and China's [discrimination] against countries with which they did not have [such deals]".

Professor Garnaut also reckons that the Chinese agricultural sector and Australia's manufacturing division will look for long lead times before having to open their markets. If there are bitter rows over these important sectors, then the relatively high level of support by Australians for a free-trade deal could diminish the overall positive image of China that the Lowy Institute survey has revealed.

A friendly and respectful relationship between the two nations is an important element in ensuring a secure Asia in the 21st century. If the Lowy Institute poll is any indication, the atmosphere for that to happen has never been more positive, but hard work will be required by both countries to ensure this remains the case.