"Social media and digital platforms in particular have empowered individuals and non-state actors to shape outcomes on issues of importance to Australia," the Department of Foreign Affairs and Trade said on its website announcing the review.

The review into soft power was promised as part of last year's Foreign Policy white paper, which stated "we need to be ready to dispel misconceptions and ensure our voice is heard when new and traditional media are used to sow misinformation or misrepresent Australian policies".

Power and influence of social media

It is understood Australian officials want to make greater use of social media to rebut criticism of Australia as well as reshape perceptions held by neighbours through means such as highlighting multiculturalism.

Australian Institute for International Affairs executive director Melissa Conley Tyler said the dispute between Canada and Saudi Arabia during the past week showed the power and influence of social media.

The spat began over a tweet issued by Canada's foreign ministry calling on Saudi authorities to release human rights activists but has spiralled into a full-blown diplomatic crisis, with the Saudis expelling the Canadian ambassador and recalling its own, frozen trade, instructed students to return home and unleashed media attacks on Canada's reputation.

Ms Conley Tyler said the Department of Foreign Affairs and Trade's original approach to social media had been for every post to be checked by higher-ups but this was unrealistic and now diplomats had more latitude.

"If you think someone is up to negotiating a multimillion-dollar trade deal, you can trust them with 140 characters in a tweet," she said.


Attractive alternatives to hard power

Ms Conley Tyler said Australian soft power efforts had suffered from budget cuts but she hoped the review would show the benefits of public diplomacy.

"For countries like Australia where we don't have hard power assets - we can't bully others or buy them off - we have to use assets that make us attractive," she said.

The review is also expected to draw upon a separate government review into the ABC's broadcasting into Asia and the Pacific following criticism of the public broadcaster's decision to discontinue shortwave radio transmissions into the Pacific.

A Chinese state-owned station has taken over those shortwave frequencies, a fresh case of Beijing seeking to gain influence in the region in addition to its foreign aid program.

Dean of Australian National University's College of Asia and the Pacific, Michael Wesley, agreed Australia and China were in a race for regional influence.

"China is very good at kicking public relations own goals through being overweening and inflexible so it's why we are taking [soft power] seriously," he said.