Australia warns against US-China tensions

China's rising and "unprecedented influence" in the Indo-Pacific region will challenge American interests, but confrontation must not define relations between the two powers, Australian Prime Minister Scott Morrison warned Thursday.

In his first major foreign policy speech, Morrison tried to tread a careful line between Australia's alliance with the United States and engaging a rapidly and evermore assertive China.

"Inevitably, in the period ahead, we will be navigating a higher degree of US-China strategic competition," Morrison told the Asia Society Australia in Sydney.

"It is important that US-China relations do not become defined by confrontation," he said, against a backdrop of the two economic behemoths trading economic sanctions and counter-sanctions in an ever-deeping trade dispute.

Australia -- a member of the "Five Eyes" Western intelligence alliance and with long-standing and close military ties with Washington -- finds itself slap-bang in the middle of one of the 21st century's geopolitical hotspots.

A quiet battle is raging for influence in the South Pacific -- a region of small island states that is vital to international shipping and provides a stepping stone for Beijing and Washington to project military and economic power across the Pacific region.

"As economic power shifts, it's unsurprising that nations will seek to play a bigger strategic role in our region," said Morrison.

"China, in particular, is exercising unprecedented influence in the Indo-Pacific," he said.

"China is the country that is most changing the balance of power, sometimes in ways that challenge important US interests."