A key security advisor to US President Joe Biden says China wanted to "drive Australia to its knees" but would eventually realise the need to re-engage.
Addressing a Lowy Institute conference on Wednesday, Kurt Campbell remarked on China's military build up, saying it had "unnerved" all Indo-Pacific nations.
"China's preference would have been to break Australia ... and then find a way forward," he said.
Mr Campbell lauded Australia's efforts in standing up to the communist giant.
"China is a country that deep down fundamentally respects strength, fortitude and resilience and I can't imagine a country that has demonstrated that more clearly than Australia," he said.
"Over time, I believe China will re-engage with Australia ... on Australian terms ... because it is in its own interest to have a good relationship with Australia."
Mr Campbell said the new trilateral AUKUS agreement between the United Kingdom, United States and Australia would be one of the most significant things the countries would accomplish.
He flagged that under the security pact, Australian sailors would serve on American ships and vice versa as well as the more frequent docking of American submarines in Australian ports.
"We're going to operate and share perspectives much more than we've done in the past," he said.
Mr Campbell also said the UK and Australia had insisted other close allies be able to work with AUKUS with regards to military innovations like cyber capability.
The comments came less than a day after the Chinese government lashed out at Defence Minister Peter Dutton for his "delusional miscalculation on China's foreign policy".
Mr Dutton used an address to the National Press Club to attack China for using its economic, security and cyber powers to compel compliance in the region and warned Australia would not bow to coercion.
He also outlined his intentions to build up Australia's military capacity as tensions in the Indo-Pacific continued to rise.
China's foreign affairs spokesman Zhao Lijian said the defence minister "brazenly distorted" the country's position and "misled" the Australian people.
"The remarks run counter to the trend of peace, development and cooperation in our world today and are detrimental to regional peace and stability," he told a Chinese media conference.
"Australia has benefited from China's development. China has never done anything that damages Australia's sovereignty.
"China firmly rejects such irresponsible remarks."
Australian Associated Press