A divided Australia is putting our economy at risk and undermining the national interest, George Megalogenis says.

The respected author and political commentator has issued a "call to arms" for Australia to transition to a Eurasian nation as a consequence of the changing demographics of immigration.

Megalogenis told the ABC's The World program that compared to the largely unskilled post-war migrants of the 20th century, migrants in the 21st century — particularly from China and India — are skilled, often already part of an elite class and are seen by their countries of birth as extensions of the state.

"[They] are really bringing an idea of the mother country to the host nation," Megalogenis said.

"A lot of their wealth, a lot of their skill set is acquired in the mother country. So, Australia receives them almost as a fully-formed member of an elite."

In The Changing Face of Australia, an essay published today in the new journal Australian Foreign Affairs, Megalogenis argues demand-driven migration is boosting Australia's economy, alleviating the effects of an aging population.

But he says political rhetoric around migrants taking jobs that would otherwise be taken by local-born Australians is dividing the country.

He says alienating skilled migrants undermines Australia's national interest by straining relationships with the migrants' countries of birth.

"How will China and India treat us in international forums in the future if we refuse to engage with their sons and daughters who want to live here?" he wrote.

Australia's south-east 'already Eurasian'

Statistics from the 2016 census indicate around 28 per cent of Australians were born overseas. If you count their children born here, that figure raises to almost half the population.

Although Australia-wide the largest percentage of Australians born overseas are from England and New Zealand, in Sydney and Melbourne the picture looks different.

Birth place of residents in Australia Australia % Sydney % Melbourne % Australia 71.7 Australia 60.9 Australia 63.9 England 4.2 China 5.0 India 3.8 New Zealand 2.4 England 3.4 China 3.7 Based on George Megalogenis' analysis of ABS Census 2016 data. Supplied: Australian Foreign Affairs

The highest number of foreign-born residents in Sydney are originally from China, with India the third highest (after England). In Melbourne, the highest number are from India, followed by China.

"The south-east corner of Australia is already Eurasian," Megalogenis told The World.

"But the north and the west are actually more Anglo relative to Melbourne and Sydney than they've ever been. And in a political sense, that means … leaders [are] trying to juggle two Australias."

In his essay Megalogenis suggests that rather than using demographic divides for domestic political gain, Australia's foreign policy needs to shift away from its Anglo European roots and engage more positively with the mother countries of foreign-born Australians.

China's influence in Australia

Megalogenis also argues that the current political rhetoric around immigration is emboldening Beijing "in its attempt to monitor the Chinese in Australia".

High-ranking Australian officials such as DFAT Secretary Frances Adamson and former secretary of Defence Dennis Richardson have this year expressed concern about Beijing's influence in Australia.

In a speech to the National Press Club in May, Mr Richardson warned that the Chinese Government "keeps a watchful eye inside Australian Chinese communities and effectively controls some Chinese language media in Australia".

And Ms Adamson last week warned that Australian universities needed to protect themselves from Chinese Communist Party influence.

Foreign Minister Julie Bishop also weighed in this week, urging the Communist Party to respect freedom of speech in Australia.

Earlier this year a Four Corners investigation revealed the extent to which Chinese students were monitored in Australia.

Megalogenis believes this monitoring of Chinese Australians will be counterproductive and that pressure from the Chinese Communist Party will drive "new arrivals into the arms of Australia's extended multicultural family".

He says for migrants to be "loyal" to Australia, they need to see themselves represented in Australian businesses and cultural institutions.

He says this shift should happen naturally as businesses look to reflect Australia's changing demographic.

"The market's going to settle this issue for us in the next 10 years," Megalogenis said.

"If you're the AFL or the NRL [for example], ... to stay connected to that new market, to keep spreading your code ... you need to find a way to include them [Asian Australians] as, not just fans, but as administrators."

Watch the full interview with George Megalogenis on The World.