CANBERRA (BLOOMBERG) - Australian Prime Minister Scott Morrison has warned that intensifying competition between the US and China is pressuring other nations to choose sides, and urged the superpowers to give governments "more room to move".

Mr Morrison, who has long tried to balance Australia's close trading ties with China and enduring security alliance with the US, said the ongoing rivalry had created challenges for Indo-Pacific nations that could spread further west.

"Like other sovereign nations in the Indo-Pacific, our preference in Australia is not to be forced into any binary choices," Mr Morrison said in a speech to a UK-based think tank on Monday night (Nov 23).

"Our present challenge in the Indo-Pacific though is a foretaste for so many others around the world, including the United Kingdom and Europe."

Australia is the world's most China-dependent developed economy and deteriorating diplomatic ties with Beijing have led to a string of its commodities exports being targeted.

China has accused Australia of siding with the US after Canberra blocked Huawei Technologies Co from building its 5G network and called for a probe into the origins of the coronavirus.

Similar tensions are playing out in Europe, as Beijing seeks to keep the continent from aligning more closely with the US on disputes ranging from market access to human rights.

'More room'

"If we are to avoid a new era of polarisation, then in the decades ahead there must be a more nuanced appreciation of individual states' interests in how they deal with the major powers. Stark choices are in no one's interests," Mr Morrison said.

"Greater latitude will be required from the world's largest powers to accommodate the individual interests of their partners and allies. We all need a bit more room to move."

Mr Morrison rejected any notion that Australia needs to pick sides.

"Australia desires an open, transparent and mutually beneficial relationship with China," he said.

"Equally we are absolutely committed to our enduring alliance with the US, anchored in our shared world view, liberal democratic values and market-based economic model."

Since Canberra's call for the virus probe in April, Beijing has placed crippling tariffs on Australia's barley exports, halted beef imports from several large meat plants, warned its citizens against holidaying or studying in Australia and ordered traders to stop buying at least seven commodities including coal, copper and wine.

China has become increasingly vocal in recent weeks in saying Australia is to blame for strained ties.

"The root cause of the deteriorating bilateral ties is Australia's repeated wrong acts and remarks on issues concerning China's core interests and major concerns as well as its provocative and confrontational actions," China's embassy in Canberra said in a statement posted on its website on Monday.

"Those who have caused problems should be the ones to solve problems."

US puppet

In his speech, Mr Morrison dismissed the notion that Australia is a puppet of the US.

"Our actions are wrongly seen and interpreted by some only through the lens of the strategic competition between China and the US," he said.

"It's as if Australia does not have its own unique interests or it's own views as an independent sovereign state. This is just false. And worse it needlessly deteriorates relationships."