Australia's former Prime Minister Paul Keating has warned that Australia's present foreign policy is incapable of handling the rise of China and the waning influence of America globally.

"The fact is Australia needs a foreign policy and it needs it urgently and Australia does not have a foreign policy, that's the biggest problem," Keating said.

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Keating made the critical remark on Australia's foreign policy while addressing the Australia-China Relations Institute at the University of Technology in Sydney, ABC News reported.

"We both need and deserve a nuanced foreign policy which does take account of these big seismic shifts in the world. And we can't ever be caught up in some containment policy of China ... to assist the Americans in trying to preserve strategic hegemony in Asia and the Pacific," Keating told the audience in Sydney.

He added that Australia should not just help the US to preserve the strategic hegemony in Asia and the Pacific, claiming that America is incapable of preserving its dominance in the region.

Keating also lamented over the diminishing influence of Australia's foreign policy, adding that Australia has become a much more marginal power over the last 20 years. He noted that humanitarian operations such as responding to the downing of Malaysian Airlines flight MH17 were worthy efforts to enhance Australia's influence, but not enough.

Keating voiced support for the Australian government's recent decision to block the sale of Ausgrid to Chinese companies.

"I don't think any state-owned company of any country ought to hold or be able to own and control key strategic telecommunications assets in Australia," Keating said.       

However, Keating added that he has no problem with foreign companies owning non-strategic assets in Australia.

TagsAustralia, Paul Keating, Australia and China, Paul Keating Chna