Australia has been urged to stockpile munitions, improve land-based strike capabilities and "rebalance" military deployments away from the Middle East in the face of China's rising strength in the Indo-Pacific.

Key points: The report by the United States Studies Centre addressed military strategies in the Indo-Pacific

The report by the United States Studies Centre addressed military strategies in the Indo-Pacific The report says Australia needs to work with its allies to maintain deterrence against possible Chinese aggression

The report says Australia needs to work with its allies to maintain deterrence against possible Chinese aggression The report's authors recommend Australia increases stockpiles and acquire robust land-based strike and denial capabilities

The Morrison Government is soon expected to accept a request to join a US-led coalition to protect shipping in the Persian Gulf from Iranian interference, but a new study warns Australia's defence priorities lie closer to home.

The report by the United States Studies Centre at the University of Sydney concludes "America no longer enjoys military primacy in the Indo-Pacific and its capacity to uphold a favourable balance of power is increasingly uncertain".

"Australia is still very much involved in the wars of the Middle East, notwithstanding the fact that we have seen some drawdown in our commitment, and frankly the commitment of the United States there recently," co-author Ashley Townshend said.

"We're at a dangerous time because we're about to receive a request, it's already been made from the Secretary of State Mike Pompeo, to bring us back over there in a more substantial way," he added.

The 100-page report also suggests a strategy of "collective defence" is "fast becoming a necessity as a way of offsetting shortfalls in America's regional military power and holding the line against rising Chinese strength".

The report suggests Australia become involved in a strategy of "collective defence" with the United States. ( ABC News: Tracey Bloom )

It finds Australia spent a total of $14.7 billion on operations in the Middle East between 2001 and 2018, compared to only $3.9 billion for operations in the Indo-Pacific over the same period.

"Australia needs to work with its friends — the United States is committed to maintaining military presence and maintaining deterrence against possible Chinese aggression in Asia, but it can't do that alone," Mr Townshend warned.

The report also urges Australia to "increase stockpiles and create sovereign capabilities in the storage and production of precision munitions, fuel and other material necessary for sustained high-end conflict" and "acquire robust land-based strike and denial capabilities".

Last year Australia's newly appointed Chief of Navy Mike Noonan flagged a greater focus on maritime operations in the Pacific following three decades of continuous operations in the Middle East.

A separate report by the Australian Strategic Policy Institute, also being released today, finds Australia needs to invest more in its north to ensure the country is ready and capable to defend itself.

"The local industry base, the logistics all need to be in place especially now when we've got such a period of heightened strategic challenges in terms of issues like the relationship between the US and China," the report's author John Coyne said.