Australia should brace for a strong response by China after reports the Federal Government was in talks about strengthening US military capability in the Northern Territory, an expert has warned.

"Australia should expect a large amount of rhetoric from state-backed media or a foreign ministry spokesman," Dr Coyne said.

Acting US ­ambassador to Australia Mike Goldman said the closer links "just makes sense" in light of the "new geostrategic context" in the Asia Pacific region.

Australia is in talks with Washington to build US-designed missiles on home soil and to store a stockpile of American munitions in the NT, as tensions between China and the West soar.

While nothing has been finalised, Prime Minister Scott Morrison announced in March the government plans to shell out $1billion to start producing hi-tech guided missiles in Australia.

#redefiningAnzus

Australia will spend A$747 million ($580 million) to upgrade four military bases in its north and expand war games with the United States, Prime Minister Scott Morrison will say on Wednesday.

An airstrip in the Northern Territory will be lengthened to support larger aircraft, firing ranges overhauled and new training facilities set up for defence personnel and U.S. marines, according to extracts of the announcement seen by Reuters.

“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,” Prime Minister Scott Morrison will say.

Australian Defence Minister Peter Dutton on Sunday said a conflict between China and Taiwan “should not be discounted”.

Drills will include air combat exercises designed to improve ability to use smaller airfields in case its main bases come under attack.

The joint exercise at the Andersen Air Force Base, known as Cope North 2021, started on Wednesday and will run until February 19 and will see the base hosting F-35A joint strike fighters for the first time.
The exercise kicks off with an exercise designed to improve the three countries’ ability to carry out humanitarian operations in response to a natural disaster in the region, according to a statement from the US air force in the Pacific.
It also includes air combat drills designed to improve their flexibility and common communications ability.

one commander had said that one aim was to improve the forces’ ability to operate from small, rough airfields with limited facilities – also known as austere airfields– a move analysts said was designed to make it harder to “wipe out” US air power with missile attacks on major bases.

The Biden Administration will likely be "focussed on national securities," meaning Australia may have to make harder choices in the defence space, according to the Lowy Institute’s Richard McGregor.

“Trump was focussed on trade,” Mr McGregor told Sky News. “The Biden Administration might be much more focussed on national securities.

“That might mean harder choices for us in the defence space.”

Mr McGregor said this may mean the US would expect Australia to look at things including “intermediate range missiles” and the possible placement of “more Marines in Darwin”

“They might like us to do greater naval exercises in the South China Sea,” he said. “I think they’re going to expect us to step up as a strong ally.”