US NAVY warships should be based in Perth in order to combat China’s growing presence in the Indo-Pacific, a new report has warned.

The Countering China’s Militarisation Of The Indo-Pacific report, by Washington’s Centre for Strategic and International Studies, calls on Australia and its allies to “spotlight and push back” against China’s power projection in the region if they want it to remain “free and open”.

“China’s military penetration into the South Pacific would challenge one of the oldest and most fundamental tenets of Australian strategic doctrine, the exclusion of outside military powers from its island approaches,” the report warns.

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The expert document comes a week after China’s military issued challenges to three Australian warships sailing through the South China Sea to Vietnam earlier this month.

It also follows reports Beijing is seeking to establish a permanent military base in Vanuatu, less than 2000km from the Australian border, which defence experts have described as a “massive nightmare” for our country.

China and Vanuatu have both denied the initial Fairfax report, with Foreign Minister Ralph Regenvanu saying Vanuatu is “not interested in militarisation”.

To counter China’s growing infrastructural presence in the South Pacific, South-East Asia and the Indian Ocean, the CSIS report recommends the Turnbull Government “establish a rotational presence of US surface combatant vessels at HMAS Stirling in Western Australia”.

It also calls on Australia, the United States, Japan and India to work together to build greater maritime domain awareness in the Indian Ocean, as well as establish a “joint task force for low-intensity operations” such as counter-piracy and humanitarian aid for the Indo-Pacific.

Tensions have risen sharply between Australia and China in recent months.

Just last week, Chinese ambassador to Australia Cheng Jingye warned it could have consequences on the two countries’ trade relations.

Mr Cheng criticised the state of Canberra and Beijing’s relationship, warning that Australia needs to do more to “increase mutual trust”.

“If there is a growing lack of mutual trust, in the long run it may have some undesirable impact (on trade relations with China),” he told The Australian.

“Unfortunately, over a certain period, especially starting from the latter half of last year, we have seen a kind of systematic, irresponsible, negative remarks and comments regarding China which has caused adverse impact on bilateral relations.

“It is detrimental to the image of Australia in the eyes of the Chinese public. It is something that neither side would like to see.”

There’s an array of other hostilities between the two nations.

Last month, it was reported China had been deferring a range of visits in order to take a political stand against Australia.

The state-run Global Times newspaper has described Australia’s behaviour in recent years as “baffling” and “repugnant”, accusing us of being an “anti-China pioneer in the last two years” and warning that Canberra “cannot afford worsening ties with China”.

China’s embassy in Canberra has issued safety warnings to Chinese students living in Australia, although new figures have revealed that the number of Chinese students studying here is actually rising.

But the CSIS report praised Mr Turnbull for taking a “firm stand against a permanent Chinese military presence”.

Earlier this month, the Prime Minister downplayed reports that the relationship was under threat.

“We have a very strong economic relationship with China, in fact it’s strengthening all the time,” he told reporters from London.

“From time to time there are differences in the relationship. If there are ups and downs, it’s from a very, very high base.

“Trade has never been higher in every respect.”

He also said the government would not back down from the foreign donation laws.

“We are taking every step that we can, with our foreign interference legislation, to ensure that Australians, and Australians only, are the ones who influence Australian political processes.”