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Multi-million expansion of Australian military bases in signal to China

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Defence Minister Peter Dutton says Australia will however work to try to maintain peace

A spokesperson for China's Foreign Minister, Wang Wenbin, reaffirmed the strong unification goal China seeks with Taiwan but said Australia needs to understand the "high sensitivity" around the issue.

Australian home affairs minister Karen Andrews said she had approved of the wording of Pezzullo's message.

Defence Minister Peter Dutton says Australia will, however, work to try to maintain peace.

How have Australian politicians reacted to the remarks?

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Senior Australian opposition lawmaker Bill Shorten described Pezzullo's reference to "drums of war" as "pretty hyperexcited language", saying "I'm not sure our senior public servants should be using that language because I'm not sure what that actually helps except to cause more anxiety".

Mike Pezzullo said Australia must strive for peace, but not at the cost of its liberty.

"Working with the United States, our allies and Indo-Pacific neighbours, we will continue to advance Australia's interests by investing in the Australian Defence Force, particularly across Northern Australia", Mr Morrison said in a statement, published by The Australian.

At the same time, China has aggressively ramped up its military activity in the South China Sea and over Taiwanese air space.

Previously, the Defence Minister said war with China over Taiwan "should not be discounted".

"It is hoped that the Australian side will fully recognize that the Taiwan question is highly sensitive, abide by the one-China principle, be prudent in its words and deeds, avoid sending any wrong signals to the "Taiwan independence" separatist forces, and act in ways beneficial to peace and stability in the Taiwan Strait and conducive to China-Australian relations".

China - one of Canberra's biggest trade partners - has since imposed tariffs and other restrictions on certain Australian exports.

Beijing's military buildup, combined with moves to fortify its hold on disputed territory in the South China Sea, has raised fears that it could look to deny the USA military access to waters off China's coastline.

Last week, Australia cancelled two Chinese Belt and Road Initiative infrastructure deals.

During a speech on Monday outlining her vision for the island nation's relationship with Beijing, New Zealand Foreign Minister Nanaia Mahuta said her government would resist efforts by its allies, including Australia, to expand the role of Five Eyes to combat increasing Chinese aggression.

"We're obviously very conscious as a government of what is happening in the Pacific region, in particular, and we will always put Australia first, second and third".

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