CANBERRA - Australia's Prime Minister Scott Morrison has said his government held a less dramatic view of US-China strategic tensions than a predecessor who warned of a potential "hot war" before US presidential elections in November, but added that a conflict is no longer inconceivable.

Morrison's comments at the Aspen Security Forum on Wednesday came days after former Australian Prime Minister and China scholar Kevin Rudd wrote in the Foreign Affairs journal that the risk of armed conflict between the United States and China in the next three months was "especially high".

Morrison said his administration "expresses it differently and certainly not as dramatically" as Rudd's views.

But "we've acknowledged that what was previously inconceivable and not considered even possible or likely in terms of those types of outcomes is not considered in those contexts anymore," he said in an online address from the Australian capital, Canberra.

Australia last month said it would boost defence spending by 40 percent over the next 10 years, buying long-range military equipment that will be focused on the Indo-Pacific region, where both Beijing and Canberra are competing for influence.

Morrison said building an Indo-Pacific alliance with like-minded nations will be a "critical priority" for his government, warning the pace of militarisation in the region was unprecedented.

"Today, the Indo-Pacific is the epicentre of strategic competition. Tensions over territorial claims are growing," he said.

Australia's relations with China, its most important trading partner, has plummeted to new lows in part because of Canberra's calls for an independent investigation into the origins of and responses to the coronavirus.

Morrison said China's rise as a major economic partner has been good for the global economy, Indo-Pacific region and Australia, "but with economic rise comes responsibility".

Morrison also disagreed with many in Washington that Washington was in a new Cold War with China, saying the "circumstances are quite different". He stressed that China and the US together have a "special responsibility" to respect international law and should resolve their disputes peacefully.

However, he had no answers for how China's push for power in the South China Sea, on the Indian border and in Hong Kong should be handled.

"I'm an optimist, Australians are indefatigable optimists about these things," Morrison said.(FA)