Scott Morrison has played down the prospect of Pacific nations becoming entangled in bidding wars between Australia and China.
The prime minister announced a Pacific pivot last week, backed by a $3 billion infrastructure fund for projects throughout the region.
The move was widely viewed as an attempt to curb China's growing influence in the Pacific.
China issued a strong statement on Tuesday declaring the region was not a "sphere of influence" for any one country.
Beijing says no country can block China's co-operation with Pacific nations.
Mr Morrison denied there was now a sense of competitiveness with China or that the nations could be the subject of a bidding war.
"No, I don't believe so and that's certainly not the spirit of which we have entered into this new initiative," he told reporters on Wednesday.
Mr Morrison said Australia was working with a range of nations to develop the Pacific.
"We're not doing that to the exclusion of others," he said.
Mr Morrison has indicated Australia may be willing to help fund one-off projects through China's Belt and Road Initiative, despite signing a rival deal with Japan and the US.
In Singapore for the East Asia Summit, the prime minister also struck a conciliatory tone on disputes in the South China Sea.
He declined to back US calls for China to pull its missiles off disputed territory in the Spratly Islands.
"When it comes to disputed claims in the South China Sea, as I've said, we're not taking sides on that issue," Mr Morrison said.
"But we continue to express our position when it comes to freedom of navigation and movement through that part of the world, as well as overflight."
Malaysia has warned rising US-China trade tensions risk triggering a "domino effect" of protectionist measures throughout the Indo-Pacific.
But Mr Morrison has stressed the need to cut through the "atmospherics" and the "unorthodox and unconventional" approach to trade by US President Donald Trump.
Despite the tit-for-tat trade dispute, Mr Morrison is certain the US is focused on pursuing free and open trade channels.
"I believe that's what the ultimate objective is here," he said.
"We need to ensure we keep a focus on what the end-outcome here is that we're all seeking and I believe that's what the United States is seeking to achieve."
Ahead of a meeting with Chinese Premier Li Keqiang, the prime minister has been careful not to put Australia's key trading partner offside.
His is the first meeting with a Chinese leader in the past year, signalling a thawing in diplomatic tensions following Australia's foreign interference debate.
Australian Associated Press
