Australia does not need to take sides between the United States, its main ally, and China, its biggest trading partner, Chinese Premier Li Keqiang has said.
"We respect your choices in your foreign policy," Mr Li told Australian lawmakers and businessman in a speech at a luncheon in Canberra.
"We don't want to see (Australia) taking sides, as happened during the Cold War," added the Premier, who is on a five-day visit to Australia that ends tomorrow.
While the focus of his trip - the first by a Chinese Premier in 11 years - is trade, Mr Li also took the opportunity to reiterate his country's peaceful intentions.
"We come here for peace in the region. Only with peace and tranquillity can China concentrate on its economy and development," he said on Thursday.
NO NEED TO TAKE SIDES
We respect your choices in your foreign policy. We don't want to see (Australia) taking sides, as happened during the Cold War.
CHINESE PREMIER LI KEQIANG, on the foreign policy dilemma that confronts Australia when Sino-US tensions rise.
Canberra increasingly finds itself in a bind when Sino-US tensions rise. This conundrum has become known in Australia as the "China choice" - and Canberra has recently signalled that it remains committed to US leadership in the region.
Commentators saw Mr Li's comments as a response to a recent speech by Australian Foreign Minister Julie Bishop, who said in Singapore last week that China's lack of democracy will prevent it from reaching its economic potential.
A strategic studies and defence expert, Professor Hugh White, from the Australian National University, said that Mr Li was reminding Australia that the two countries have different political systems and he did not believe Canberra should lecture Beijing about democracy.
"It was a gracious and nicely put-together speech by the Premier but it contained some ribs of steel," he told The Australian Financial Review.
Mr Li's visit comes amid growing concerns in the region about China's territorial assertiveness in the South China Sea. US President Donald Trump has signalled a more muscular approach towards Beijing - a position that has only added to the regional uncertainty.
Australia, like many other nations in the region, has opted to tread a delicate line. But Ms Bishop's speech was seen as a signal that her country will back the US if tensions rise.
Prime Minister Malcolm Turnbull, during a joint press conference with Mr Li yesterday, repeated Canberra's insistence that all countries in the region should avoid increasing tensions. They should not take "actions of militarisation of disputed features", he added, in comments aimed at Beijing.
For his part, Mr Li insisted that China was not seeking to "militarise" the South China Sea and would suffer the most if trade routes were disrupted, because it is the world's biggest trader.
"With respect to the so-called militarisation, China never has any intention to engage in militarisation in the South China Sea," he said.
"Our facilities on the islands and reefs are primarily for civilian purposes with a certain amount of military equipment to protect the freedom of navigation and overflight."
Analysts in Australia continue to debate how Canberra should approach its relations with Beijing - in particular, whether it should avoid confrontation and focus squarely on burgeoning trade and economic ties.
Some suggest that Australia's failure to make a decision on this issue has confused China and further disrupted the relationship.
A former Australian ambassador to China, Mr Geoff Raby, said Australia has struggled to decide whether to pursue "values" - such as raising concerns over China's approach to democracy and human rights - or "pragmatism" and trade.
This failure to choose, he said, has led to misunderstandings and confusion in the relationship.
"We are viewed as an unreliable partner, even a potential adversary, while diminishing our capacity to influence Beijing's thinking to our advantage," he wrote in The Australian Financial Review.