Kevin Rudd who led the Australian Labor Party to win the election in November 2007 proposed in June 2008 to set up Asia-Pacific Community (APC) by 2020. His proposal surprised many people inside and outside Australia. The initial responses from the international community were largely lukewarm, except China. However, with the election of Barak Obama as the US President, chances of the realization of the proposal seem increasing, because Obama is in favor of multilateralism. The positive atmosphere nevertheless has encounters a new challenge posed by the Kevin Rudd Government itself in May 2009, when the Government publicized Defence White Paper 2009：Defending Australia in the Asia Pacific Century: Force 2030. Suspicious of Rudd's true intention, China now holds a reserved attitude toward his APC proposal. This paper is aimed to explore the proposal.