Canberra, Jul 1 (IANS): Australia on Wednesday said that it will significantly increase military spending and focus on the Indo-Pacific region amid rising tensions between the US and China.

Prime Minister Scott Morrison pledged A$270 billion ($186 billion) to Australia's arms budget over 10 years, a 40 per cent boost, the BBC reported.

The new defence capability budget, about 2 per cent of the GDP, replaces a previous decade-long strategy, set only in 2016, which had set aside A$195 billion.

Morrison said that Australia would acquire long-range missiles and other capabilities to "deter" future conflicts.

It was necessary because the region was the "focus of the dominant global contest of our age", he added.

The Prime Minister named several areas of tension including the border between India and China, and conflict over the South China Sea and East China Sea.

It follows deteriorating relations between Australia and China - which are widely seen to be at their worst in decades.

Morrison said much spending would go to upgrading arms and equipment.

Australia will purchase from the US Navy up to 200 long-range anti-ship missiles, which can travel up to 370 km.

It will also invest in developing a hypersonic weapons system - missiles which can travel thousands of kilometres, said the BBC.

Up to A$15 billion would be spent on cyber warfare tools - which the Prime Minister noted "says a lot about where the threats are coming from".

Last month, he warned that Australian institutions and businesses were being targeted by cyberattacks from a "sophisticated state actor".

The remarks were broadly interpreted as aimed at China.