Australia's foreign policy strategy is driven by the dynamically changing foreign and economic environment in the Asia-Pacific region. The increasing geopolitical competition of great powers is forcing Australia to shift its focus to the Indo-Pacific region (IPR). At the same time, the concentration on intraregional transformation negatively affects its global status as a middle power. With the weakening in the IPR position of its main military-political ally – the United States – Australia is looking for a new place in regional politics. In response to China’s economic and military-political expansion, Australia seeks to maintain its influence in Oceania and balance China in IPR, drawing closer to ASEAN member states on economic and security issues. One of the most effective tools of deterrence China is Quad. This format contributes to the intensification of economic and political cooperation of Australia with its participants, primarily with India. However, Australia is not ready to go for provocations against China or for an open confrontation with it due to the existence of deep economic ties between the parties, therefore its approach to Quad remains cautious. At the same time, Australia is strengthening dialogue and political cooperation with China, despite contradictions on ideology, regional security and competition for influence in Oceania. The article conceptualizes the status of “middle power” and proves the possession of Australia by this status. Based on the theoretical developments of the representatives of political realism in the theory of international relations, the foreign policy behavior of Australia as a middle power is revealed. An analysis of Australia’s system of alliances and treaties allows us to talk about diversifying its foreign policy and striving to maintain a balance, avoiding either a roll of its own policy towards any partner, or strengthening one of the powers in the region. With the weakening of the United States, Australia is gaining additional opportunities in IPR, acting from case to case – as a neutral power, a consistent partner, a loyal ally, a driver of economic development, initiator of multilateral political interaction. Despite the decrease in Australia's subjectivity in the global system of international relations, today, by most criteria, it remains a middle power with a corresponding to this status model and foreign policy strategy.