Prime Minister Scott Morrison insists Australia will not pick sides between the United States and China as the two global superpowers square off.
Competition between the US and China for dominance in the Indo-Pacific has loomed large over the East Asia Summit in Singapore this week.
US Vice President Mike Pence stoked the simmering tensions on Thursday, telling Southeast Asian leaders there was no place for "empire and aggression" in the region.
His comments have been widely interpreted as a reference to China's rise.
"Like you, we seek an Indo-Pacific in which all nations, large and small, can prosper and thrive," Mr Pence said in Singapore.
"We all agree that empire and aggression have no place in the Indo-Pacific."
Beijing and Washington are also locked in a trade war in which they have imposed increasingly severe rounds of tariffs on each other's imports.
Malaysia has warned the rising tensions risk triggering a "domino effect" of protectionist measures throughout the Indo-Pacific.
But Mr Morrison has urged world leaders to cut through the "atmospherics" of the stoush and concentrate on progressing free trade.
Australia has been forced to walk a delicate tightrope this week in balancing its relations with the US and China.
Washington is Australia's closest military ally and Beijing its biggest trading partner.
"Australia doesn't have to choose and we won't choose," Mr Morrison told reporters on Thursday.
"We will continue to work constructively with both partners based on the core of what those relationships are.
"We don't choose between the issues - we don't choose between the partners - we get on with the relationships."
Mr Morrison met with Chinese Premier Li Keqiang while in Singapore, the first high-level meeting of its kind in more than a year.
Premier Li said the meeting marked a turning point after heavy strain on Australia-China relations over the past 12 months.
"We're getting on with business with China," Mr Morrison 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.
The prime minister also struck a conciliatory tone this week 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.
The prime minister is expected to meet with Chinese President Xi Jinping at the APEC Summit in Papua New Guinea this weekend.
Australian Associated Press
