As a developed country with abundant natural resources, Australia has been an important trading partner for both Chinese mainland and Taiwan. According to Australian statistics, Chinese mainland was Australia’s No.1 two-way trading partner ($63,753 million, accounting for 13.2 per cent of Australia’s total trade) in the year 2007-2008. Taiwan was Australia’s 12th largest trading partner ($10,588.68 million, accounting for 2.76 per cent of Australia’s total trade) during the same period. Investment is another important aspect of the economic relationship. Australia has been an important FDI source for both Chinese mainland and Taiwan, although its ranking is declining. By the end of 2008, Australia’s accumulated investment in Taiwan was US$ 1023.91 million, making the country Taiwan’s 14th largest foreign investor. Taiwan’s accumulated investment in Australia was US$ 159.94 million, making it Australia’s 20th largest source of FDI. In 2007 Chinese mainland was Australia’s 14th largest investment destination ($5.2 billion) while Chinese mainland was the 17thlargest investor in Australia with a total investment of $6.2 billion. For approximately 60 years Australia has dealt with Chinese mainland and Taiwan independently, given the political and economic distance between the two places. It appears that this situation is about to change, however. The attitude of Ma Ying-jeou’s toward Chinese mainland is very different from that of his predecessor. To avoid the marginalization of the island`s economy in the global market, Ma’s government is stepping up its efforts to sign an Economic Cooperation Framework Agreement (ECFA) with Chinese mainland. His proposal is widely supported by the business sector although there is still a dissenting voice from the Democratic Progressive Partly (DPP). But it is reasonable to expect a more economically integrated China in future. The possibility of closer cross-straits cooperation in the economic relationship with Australia is a development worth considering. Will this be a win-win solution? Starting from an overview of the trade and investment relationship between Australia and Chinese mainland on the one hand, and between Australia and Taiwan on the other, and based on a comparison of trade items and investment purposes, this paper explores the implications for Australia of closer cross-strait relations.