Australia is being urged to stockpile munitions and redirect military resources from the Middle East to guard against rising Chinese strength.
A report from Sydney University's US Studies Centre has declared America no longer enjoys military primacy in the Indo-Pacific.
Its authors suggest America's capacity to uphold a favourable balance of power in the region is increasingly uncertain.
They are calling on Canberra to bolster defences of Australia's northern borders and build much closer military ties with regional allies including Japan.
Australia is also being encouraged to improve its land-based strike capabilities and increase its fuel reserves.
A second report from the Australian Strategic Policy Institute has called for a simulated "stress test" involving defence and national security agencies to check the nation's capacity to defend against sudden threats.
The ASPI report warned of a widening gap between strategic policy and the country's military assets in northern Australia.
Labor frontbencher Jason Clare said the government's task was to ensure defence assets were located in the right places and were at the appropriate state of readiness.
"We've got to be careful not to over sensationalise this whenever we're talking about a 'China threat' - I think that that can be unhelpful," he told Sky News on Monday.
Defence Minister Linda Reynolds said in a speech at the weekend that Australia's defence strategy framework was "not as agile and adaptive as it needs to be" and needed examination.
The defence forces also needed to ensure all of their new capabilities - of which there are 180 under way at a cost of around $200 billion - worked well together.
She said there were at least four "rogue" major states as well as the "old" strategic threats.
© AAP 2019