"Forget the West, our future is to the North"

Paul Keating, former Prime Minister of Australia, penned an op-ed today (or tomorrow, since it's tomorrow in Oz already) for the Sydney Morning Herald arguing for a northward turn in Australian foreign relations.

He argues that Australia can't tie its foreign policy to the US or to China, that it must take a third course, focusing on Indonesia (a candidate for the next ascendant economic and military power).

Keating writes:

While we will always have a close relationship with the US based on our shared history and our similar cultures, it is obvious that the right organising principle for our security is to be integral to the region.

From now on we have to concentrate on where we can be effective and where we can make the greatest difference. I believe that is fundamentally in south-east Asia.

Layne argues that the US will start to see states balancing against American hegemony. Is this an example of Layne's expectations? How problematic is an Australia that pulls away from the US-based security community?