Australia on Monday said it will deepen its diplomatic and defence partnerships with key allies in the strategic Indo-Pacific, including India and Japan, in response to China's growing assertion of sovereignty over the South China Sea and its threat to the global rules-based order.

Unveiling the Defense Strategic Review in Canberra, Prime Minister Anthony Albanese's government set out a blueprint for Australia’s strategic policy, defence planning and resources over the coming decades.

The public version of the final report did not label China a direct military threat to Australia, but said Beijing’s assertion of sovereignty over the disputed South China Sea “threatens the global rules-based order in the Indo-Pacific in a way that adversely impacts Australia’s national interests”.

It labelled the competition between China and the United States “the defining feature of our region and our time” and noted that America is “no longer the unipolar leader of the Indo-Pacific”.

"Investing in our Indo-Pacific regional partnerships remains essential. Australia’s focus must be to deepen its engagement and collaboration with partners across Southeast Asia and the Pacific. The Defence Cooperation Program should continue to grow, particularly in the Indian Ocean region," it said.

China claims nearly all of the disputed South China Sea, though Taiwan, the Philippines, Brunei, Malaysia and Vietnam all claim parts of it. Beijing has built artificial islands and military installations in the South China Sea. Beijing is also involved in a maritime dispute with Japan over the East China Sea.

Australia must continue to expand its relationships and practical cooperation with key powers, including Japan and India, the report said.

"Australia also needs to continue to expand its relationships and practical cooperation with key powers, including Japan and India, and invest in regional architecture... Deepening of our diplomatic and defence partnerships with key partners in the Indo-Pacific," it said.

The review spells out that the world has changed, with China amassing the greatest military build-up of any nation since World War II, and that Australia is not equipped to face it alone.

In response to a growing focus on the Indo-Pacific, the government says it will "harden the north", re-prioritising defence spending on developing northern bases and ports.

External approaches have included measures such as the adoption of the strategic framework of the Indo-Pacific; expanding regional strategic multilateral, trilateral and bilateral partnerships, including the reinstatement of the Quad partnership with Japan, India and the United States, it said.

The reports comes ahead of the Quad countries' meeting next month. Quad is a four-member grouping of the US, India, Australia and Japan that has been formed to further the shared vision of a free, open and inclusive Indo-Pacific, amidst China’s growing assertiveness in the region.

"We commissioned the Defence Strategic Review to make sure Australia is more secure. Today, we've released our response to the review. It shows how determined we are to keep Australians safe. Because national security is every government's most solemn responsibility," Prime Minister Albanese tweeted.

He said his government will continue to invest in capabilities and relationships to help build a more secure Australia and a more stable and prosperous region.

Deputy Prime Minister Richard Marles said the review is about "maintaining peace, security and prosperity in our region." "The Defence Strategic Review is a clarion call for action in light of our strategic circumstances. The Review is clear that we cannot waste any more time when it comes to acquiring critical defence capabilities," Marles said in a statement.

The report makes clear that a genuine partnership between the government, industry and unions will be critical to growing Australia’s defence industry and speeding up the acquisition of vital defence capabilities.

It recommends significant reforms to the way the defence is structured, postured and operates, to respond to current strategic circumstances.

The Albanese government has agreed, or agreed in principle with further work required, to the Public Review recommendations, and has identified six priority areas for immediate action: They include the acquisition of nuclear-powered submarines through AUKUS to improve Australia's deterrence capabilities, developing the Australian Defence Force’s (ADF) ability to precisely strike targets at longer ranges and manufacture munitions in Australia.

Improving the ADF’s ability to operate from Australia’s northern bases; Initiatives to improve the growth and retention of a highly skilled Defence workforce.

"Lifting our capacity to rapidly translate disruptive new technologies into ADF capability, in close partnership with Australian industry; and deepening of our diplomatic and defence partnerships with key partners in the Indo-Pacific," it said.

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