Kevin Rudd told Hillary Clinton in 2009 that while they needed to integrate China into the world community as much as possible, they also needed to be "preparing to deploy force if everything goes wrong".
This conversation, leaked by Wikileaks and never denied, exposed the true thinking behind his government's defence white paper delivered that year.  Australia and the US had agreed on a strategy of classic hedging, working towards the best outcome on China while preparing for the worst. And so Australia had decided on a major naval build-up, the then PM told the then US secretary of state.
It was exactly this thinking that led, after seven wasted years, to the Turnbull government plan last week to implement Rudd's vision. Because while the Rudd government's white paper promised a doubling in the size of Australia's submarine fleet, for instance, as part of its build up, Rudd never properly allowed for funding it. 
The Rudd plan to pay for the armaments was based on a fantasy in the form of an implausibly vast cost-cutting program. The Defence Department was supposed to cut $20 billion in costs over 10 years to help pay for the dozen subs and 100 combat aircraft. 
It was so implausible that when defence minister in office at the time of the announcement, Joel Fitzgibbon, was having valedictory drinks with his staff as he prepared to leave the post, he asked the assembled group: "Does anybody think they'll get the $20 billion of savings?" The staff, most of whom were defence department officials, burst out laughing.
The moment Julia Gillard replaced Rudd, she tore up his white paper in any case. Her government saw no need for a major build up and started to cut defence spending.
Labor spent six years in office and didn't commission a single major naval vessel. Defence spending as a proportion of GDP fell from 2 per cent to 1.5 per cent, the lowest since right  before World War Two.
It fell to Tony Abbott to pledge to restore the defence budget to the 2per cent level. Now Malcolm Turnbull has delivered a long-term defence strategy that combines Rudd's military vision with Abbott's promised funding.  And not a moment too soon. The sort of China that Rudd feared seven years ago has materialised in the intervening years, looming as the greatest single concern of capitals around Asia.  
The worry is not that China has built a modern navy with as many vessels as the US Seventh Fleet.  It's China's behaviour. In the South China Sea it's built artificial islands on reefs claimed by four other countries, while stalling for a decade on any agreement on a code of conduct with the 10 ASEAN countries. It has built ports and airstrips on the islands and given every appearance of using them as military bases. 
It has physically bullied fishing and other vessels from smaller claimants, notably the Philippines and Vietnam, out of the way, using superior flotillas of coastguard and other government vessels.
Many were reassured when China's President Xi Jinping said in a media conference with the US President Barack Obama in   September that "China does not intend to pursue militarisation" of disputed islands.
But all hopes were dashed two weeks ago when satellite images showed that the Chinese had actually placed advanced missile systems on one of the islands.  Two batteries of eight missile launchers and a radar system were deployed to Woody Island in the past week, part of the Paracel chain which is also claimed by Vietnam and Taiwan.
Strikingly, very few countries have the courage any longer to speak out against China's assertiveness.  In reaction to its latest destabilisation, just three non-claimant states spoke out against China's deployment of missiles - the US, Japan and Australia. The rest have been bought or cowed into silence.
That doesn't mean other nations aren't worried. The year 2014 marked the first time since the Industrial Revolution that Asian countries spent more on arms than European ones. Countries across the region are working towards the best while preparing for the worst.
The Australian decision to strengthen its navy comes at an especially vital moment because the behaviour of all the countries in the region is still being shaped.
Professor Mohan Malik at Honolulu's Asia-Pacific Centre for Security Studies points out that China's strategic thinkers are counting on the countries of the region going through three phases in response to China's new assertiveness.
He points out that leading Chinese analysts such as Yan Xuetong, Shen Dingli and Shi Yinhong believe that regional countries will soon abandon resistance and move to accommodation of China and then, finally, reconciliation on China's terms.
With the US presidential campaign giving the world a deeply unsettling premonition of a President Trump, it's a key moment for other responsible powers to demonstrate commitment to the rule of law rather than the law of the jungle.
Australia, through Turnbull's white paper, is saying that it will step up. The naval build up would not be big enough for Australia to win a standalone war against China.
But it does increase Australia's heft, complicate the plans of any enemy, and mark Australia out as an important ally in any common defence of the Asia-Pacific peace.
On China's current trajectory of increasingly using brute force against its neighbours, every country will have to make the hard choice to decide its stance. When the Soviet Union challenged Europe, Finland yielded its sovereignty to Moscow on vital matters while Britain stood staunchly opposed. 
The real significance of last week's defence white paper is Australia has chosen not to be a feeble Finland but to be a resolute Britain.     
Peter Hartcher is international editor.