Australia has closely analysed a near-miss between Chinese and United States warships in the South China Sea as plans ramp up for more military exercises in the region.
The two vessels came within metres of each other near the Spratly Islands, which China has recently militarised.
Air Marshal Mel Hupfeld, Australia's chief of joint operations, said he watched the incident "very closely".
"We have done analysis, but that's more about the nature of the event," he told a briefing in Canberra on Friday.
"The actual event itself is really for the US and China to work out and resolve.
"But we're watching what China is doing, we're watching what the US is doing, we're watching what all nations are doing in the South China Sea.
"Our focus is to make sure that we can still exercise freedom of navigation and overflight in the South China Sea area."
All three arms of Australia's military are currently involved in two weeks of security exercises in the South China Sea, along with Malaysia, Singapore, New Zealand and the United Kingdom.
France and Australia will also conduct joint naval exercises in the important trading channel in the future.
Air Marshal Hupfeld said Australia will engage with China and other countries in the South China Sea, and explain any differences of opinion on navigation.
"We aim to keep an open dialogue with China on these sorts of issues, so that we can gain an understanding as to how they operate, that they can understand how we operate, and avoid any miscalculations that may be possible," he said.
"We'll operate in accordance with international law and the laws of the sea.
"We'll continue to make sure that any other participants in that area also understand the same elements that we do to avoid those levels of misunderstanding."
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