Prime Minister Anthony Albanese has urged Australia to step up as a stabilising middle power in an Indo-Pacific he says is becoming more contested and unpredictable.
Speaking at the APEC Study Centre in Melbourne, Albanese—without directly naming China—warned the region was entering a more volatile phase driven by cyber operations, military build-ups and escalating strategic rivalry.
“Strategic competition in our region is real,” he said, describing the Indo-Pacific as “more fragmented and uncertain” than it has been in decades.
He argued that countries such as Australia, neither superpowers nor minor players, have a critical role in managing risk and preventing tensions from escalating.
“Middle powers like Australia can help ensure competition does not tip into conflict,” he said. “We can help lower the temperature, not raise it.”
The comments came as Australia confronts its most serious cyber intrusions in years, with ASIO warning that Chinese state-backed hackers are probing critical infrastructure for potential “high-impact sabotage.”
ASIO revealed last week that groups linked to Beijing, including Salt Typhoon and Volt Typhoon, had targeted electricity, telecommunications and other essential networks in both Australia and the United States.
Director-General Mike Burgess said espionage and foreign interference had already cost the national economy $12.5 billion in the past year.
APEC’s Expanding Role in Regional Stability
Albanese said economic forums such as APEC were becoming essential stabilising structures as tensions deepen.
He noted that APEC remains one of the few spaces where the United States, China, Russia, and Indo-Pacific nations continue to meet on equal terms, even as broader geopolitical friction escalates.
Last month’s meeting between President Donald Trump and Chinese Communist Party leader Xi Jinping on the sidelines of the APEC summit showed that trade-focused platforms still provide opportunities for de-escalation.
“It demonstrated how the habits of dialogue built through trade can help reduce tensions,” he said.
Albanese said trust underpins both economic cooperation and regional calm.
“For economic benefits to flow at home, you need to be able to trust partners overseas,” he said.
He noted that three-quarters of Australia’s trade is with APEC economies and “one in four Australian jobs depends on trade.”
The Opposition has often criticised Albanese for continuing diplomatic engagement with Beijing despite warnings about its behaviour, but he defended the approach as essential middle-power diplomacy.
“Our responsibility is to step up, to keep dialogue open, and to reflect the aspirations of our region,” he said.
