Former prime minister Paul Keating has warned the nation does not have a foreign policy to accommodate the rise of China, claiming Australia's international influence is waning.

Key points: Keating warns Australia must prepare for 'seismic shifts in the world'

Keating warns Australia must prepare for 'seismic shifts in the world' Says Australia has 'much more marginal' power in the world than 20 years ago

Says Australia has 'much more marginal' power in the world than 20 years ago Keating agrees with blocking of Ausgrid sale to Chinese interests

Mr Keating made the comments during a discussion on Australia-China relations and said the Federal Government must take account of the rising Asian power.

"The fact is Australia needs a foreign policy and it needs it urgently and Australia does not have a foreign policy, that's the biggest problem," he said.

Mr Keating also called on the United States to share strategic power in Asia with China, saying the US must change its foreign policy outlook when it comes to Asia.

"The United States is still fundamentally pursuing the policy for the maintenance of primacy against the obvious rise of China and therefore resisting the whole idea of sharing strategic power in Asia, which I believe the United States should do with the Chinese," he said.

Former Labor leader Mr Keating now sits on an advisory council for the China Development Bank. ( ABC News )

The former Labor leader — who now sits on an advisory council for the China Development Bank, which funds infrastructure in growing Chinese cities — said humanitarian operations such as Australia's response to the downing of Malaysian Airlines flight MH17 were "worthy", but not enough.

"Whether we're recovering people from the Ukraine after that disaster or these things, these are worthy things for an Australian nation … but they are not a foreign policy," he said.

"We both need and deserved a nuanced foreign policy which does take account of these big seismic shifts in the world."

Mr Keating said Australia should not assist the US to "try and preserve strategic hegemony in Asia and the Pacific".

"Strategic hegemony by the United States in the Pacific is incapable of preservation," he said.

Mr Keating cautioned Australia was becoming a "much more marginal power" than it was 20 years ago.

"Our influence is waning and therefore I think we should be more interested in the world around us," he said.

Keating hopes Ausgrid foreign sale block was apolitical

Mr Keating also spoke on foreign investment in Australia and asked about the current political climate, where some key Senate crossbenchers want to restrict foreign ownership.

Earlier this year, Chinese-owned Dakang Australia withdrew its takeover offer for S Kidman and Co after Treasurer Scott Morrison said he felt the proposed investment was not in the public interest.

The Federal Government has also blocked the sale of Ausgrid to Chinese and Hong Kong interests.

The Chinese Government-owned State Grid Corp and Hong Kong-listed Cheung Kong Infrastructure were both bidding for a 99-year lease of Ausgrid, which supplies power to parts of Sydney, Wollongong and the Hunter region.

Opposition Leader Bill Shorten has suggested the Government was influenced by One Nation and the Nick Xenophon Team, who want to restrict foreign ownership, by blocking the sale.

The Government scoffed at the accusation and Mr Keating said he would be "disappointed" if the decision was political.

He also said the sale of "strategic telecommunications assets" in Australia should be restricted.

"I don't think any state-owned company of any country ought to hold or be able to own and control key strategic telecommunications assets in Australia," Mr Keating said.

Mr Keating said he did not see a problem with state-owned companies owning non-strategic assets.