Australian policymakers have criticised controversial comments from a Trump Administration official who cast the brewing geopolitical contest between the US and China as a clash of different races.

Key points: A US State Department official said the China is America's first great competitor that is "not Caucasian"

A US State Department official said the China is America's first great competitor that is "not Caucasian" Senior Australian government officials have been scathing of the comments

Senior Australian government officials have been scathing of the comments Analysts have warned this plays into China's "race" narrative

The director of policy planning at the State Department, Kiron Skinner, said China posed an economic and ideological challenge to the US, adding, "I think it's also striking that it's the first time that we will have a great power competitor that is not Caucasian".

Ms Skinner said while the Soviet Union challenged the US during the Cold War, that was a "fight within the Western family" while the competition with China "is a fight with a really different civilisation".

The ABC spoke to several senior Australian government sources who were uneasy about Skinner's remarks. None would be publicly identified because they were not permitted to speak to the ABC.

Dr Skinner has only been in the role of Director of Policy Planning since September last year. ( Supplied: George Thalassinos )

"We do not share this view (and) it is deeply unhelpful," said one source.

The source said the comments were divisive and particularly damaging in multicultural societies like the United States and Australia.

Beijing often suggests it has a claim on the loyalties of the Chinese diaspora in the West, including second and third generations, because of their ethnic background.

Australia and other Western powers fiercely reject that claim.

A second Australian source said: "This is exactly the sort of framing which plays into the hands of the CCP (Chinese Communist Party). We would not use language like this in any circumstance."

US President Donald Trump and Chinese President Xi Jinping have had an up-and-down relationship. ( Reuters: Carlos Barri )

A 'foolish mistake'

Analysts have also been scathing about Ms Skinner's comments.

The head of the National Security College at the Australian National University, Rory Medcalf, said it was a "foolish mistake" which "needs to be put right promptly and categorically by the US Administration".

"One of the greatest strengths of liberal democracy is our equality and diversity. The last thing we need to be seen as doing is abandoning these qualities," he said.

"It's true and understandable the US is girding for a comprehensive strategic competitor, but it's false and self-defeating to cast this in cultural or racial terms."

China's growing economic and military might is a key source of tension with the US in the Asia-Pacific region. ( Reuters: Damir Sagolj )

The Executive Director of La Trobe Asia, Euan Graham, said US Assistant Secretary of Defence Randall Schriver should publicly disown the narrative when he presents an update on the US Indo-Pacific strategy at the Shangri-La dialogue in Singapore in May.

"It's a golden opportunity for the US to correct a counterproductive framing around a "clash of civilisations" with China, that will otherwise alienate regional allies and plays, ironically, to a CCP ethno-nationalist narrative," he said.

"They need to 'lance this boil' with some urgency."

Some Australian government sources said Skinner's comments had already been firmly rejected by the US foreign policy establishment, and hoped that it was an aberration.

But there are also concerns that other figures within the Trump Administration view the contest with China in similar terms.

Former Trump adviser Steve Bannon has championed an ethno-nationalist narrative which pitches the US contest with China as a clash between two different civilisations.

Rory Medcalf said Kiron Skinner's comments were also historically inaccurate.

"In fact, one of the most malign influences on China's behaviour is nothing innately Chinese but a 20th-century Western import called Leninism," he said.

"(And) America has faced non-European rivals before, namely Japan, and has been humbled by an Asian country before, namely Vietnam."