MELBOURNE (PTI): Australian Prime Minister Scott Morrison on Wednesday said 270 billion Australian dollars will be invested to modernise the country's defence capabilities in the coming decade to maintain regional security and deter or respond to "aggression" in the strategic Indo-Pacific, amidst China flexing its muscles in the region.

"The challenges and nature in the Indo-Pacific have meant we need a new approach and one that actively seeks to deter actions that are against our interests, the prime minister said.

Morrison said that the Indo-Pacific was the epicentre of rising strategic competition and tensions. Territorial claims are rising across the Indo-Pacific region, as seen recently on the border between India and China, and the South China Sea, and the East China Sea.

China has been fast expanding military and economic influence in the Indo-Pacific region, triggering concern in various countries of the region and beyond.

China is also engaged in hotly contested territorial disputes in both the South China Sea and the East China Sea. Beijing has built up and militarised many of the islands and reefs it controls in the region. Both areas are stated to be rich in minerals, oil and other natural resources and are vital to global trade.

Morrison said the world was changing rapidly after the COVID-19 outbreak. This simple truth is this: Even as we stare down the COVID pandemic at home, we need to also prepare for a post-COVID world that is poorer, that is more dangerous and that is more disorderly, the prime minister said.

"The risk of miscalculation and even conflict is heightening. Regional military modernisation is occurring at an unprecedented rate," Morrison said.

''You've got to have a responsible deterrent and Australia plays an important role in our region, working with others, particularly like India and Japan and many other nations, Indonesia, right across the Indo-Pacific,' he said.

India, Australia, the US and Japan are part of the Quadrilateral Security Dialogue (Quad), an informal grouping which shares intelligence and conducts military drills.

"'We've got to be aware of the potential threats that can emerge. I mean, the strategic competition between China and the United States means that there's a lot of tension a lot of risk of miscalculation,'' he told a news channel.

In an official statement, Morrison said the new investments totalling 270 billion Australian dollars (USD 186.7 billion) will be made across air, maritime and land assets to give the Australian Defence Force enhanced options to protect interests and its assets.

The new defence plan, he said, was ''to maintain regional security and deter or respond to aggression in the Indo-Pacific as part of the 2020 Defence Strategic Update and Force Structure Plan."

The new defence expenditure will include acquiring advanced maritime strike capability system AGM-158C Long Range Anti-Ship Missile (LRASM) from the US Navy at an estimated cost of 800 million Australian dollars (USD 553 million), 9 billion Australian dollars (USD 6.2 billion) will be spent on developing hypersonic weapons and an additional recruitment of 800 defence personnel will be done, including 600 personnel in the Navy.

"These new capabilities will provide a strong credible deterrent in our region that will help provide the stability and security we need,'' Morrison said, adding that investments would also be made for integrated and automated sensors and weapons.

"'We're for a peaceful, stable Indo-Pacific, a certain environment in which people can trade and live their lives and sovereign nations can work and trade with each other and have good relationships,'' he said.

Defence Minister Linda Reynolds said military capability in the region was modernising rapidly and it needed to maintain a regional capability edge.

It is essential that we have the capabilities that can hold forces and infrastructure at risk from a greater distance, to influence decision-making of those who may seek to threaten our national interests, Reynolds said.