"While Australia was changing Asia was changing too.
"This (Asia's rise) is not only unstoppable, it is gathering pace," Gillard said, releasing a sweeping policy blueprint entitled 'Asian Century White Paper' aimed at maximising links with Asia which will power Australia into the world's top 10 wealthiest nations by 2025.
Above all, success for an open Australia in a middle- class Asia starts in the classrooms, training centres and lecture theatres of this nation, the Prime Minister said.
All Australian schools will engage with at least one school in Asia to support the teaching of a priority Asian language -- Mandarin, Hindi, Indonesian or Japanese, she said.
"Unlike in ages past, we will not settle for a student sitting at the back of the class not learning and then drifting away from school early. We can no longer tell ourselves this is all OK because a manual job will materialise for the child who cannot read, write or count," she said.
Gillard also mentioned that Australia was a friend to all countries.
"We are supporting the stabilising presence of the United States, a strong Defence Force, building habits of trust and cooperation in our region," she said, adding "We have an ally in Washington respect in Beijing and more, an open door in Jakarta and Delhi, Tokyo and Seoul."
Focusing on Asia, she said the region will be home to most of the world's middle class by as early as 2025. "This is good news for Australia and it should drive a profound change in our thinking about our economic relationship with Asia."
But, Gillard cautioned, the opportunity posed by this middle-class boom would not "fall into our laps."
"The world will still be a competitive one where we must make our own living and our own way," she said. "But with the right plan, we can make the new middle-class Asia a new market for a high-wage, high-skill Australia."
By 2025, Gillard said Australia's GDP per person - a measure of personal wealth - would jump into the world's top 10, joining the likes of Qatar, Singapore, Hong Kong, Brunei, the United Arab Emirates and the United States.It is currently ranked 13th, according to the IMF.
Gillard said Asia was not a threat to Australia's high- skill, high-wage road. "It is a reason to stay on it."
Australia's challenge was to ensure Australian workers received the benefits. "Success in this century will be hard fought and hard won. We must have a clear plan to shape our future," she said.
Objectives for 2025 and the pathways across five key action areas have been identified which would include boosting Australia's economic strength, building its capabilities and knowledge of Asia, better integration with Asian markets, building security in the region and deeper relationships with the region's most important countries.
The government will provide 12,000 Australia Awards to Asian nations over the next five years to promote people-to-people links between Australia and the region.
It will support business missions through an Asian century business engagement plan led by Trade Minister Craig Emerson.
Australia will also make it easier for low-risk people to visit and encourage more tourists from China and other key Asian markets.
"These are important, immediate steps for government," Gillard said. "They are the beginning for our long-term national plan."
Stating that the White Paper was a "plan for national success" which would engage governments at all levels, business, as well as the community, Gillard said "We can only win in this century if every sector of our economy is dynamic, productive, engaged."