Australia will begin co-manufacturing guided weapons with the US next year to boost supply for allies in the Indo Pacific and increase a US military presence in the country, including bomber aircraft, the two nations said after annual defence talks, Paralel.Az reports citing Reuters.

Australia and the United States are already working to upgrade air bases in northern and western Australia, which are closer to potential flashpoints with China in the South China Sea than Australia's capital of Canberra.

After annual AUSMIN talks in Annapolis, Maryland, U.S. Defense Secretary Lloyd Austin said there would be an increase in the presence of rotational U.S. forces in Australia.

"This will mean more maritime patrol aircraft and reconnaissance aircraft operating from bases across northern Australia. It will also mean more frequent rotational bomber deployments," he said.

In opening remarks Austin said the two allies faced shared security challenges including "coercive behaviour" by China.

A joint statement released after the AUSMIN talks expressed concern over Chinese military activity around Taiwan, and China's excessive maritime claims in the South China Sea.

They "noted grave concern about China's dangerous and escalatory behavior toward Philippine vessels lawfully operating within the Philippines' exclusive economic zone".

There are no U.S. military bases in Australia, but the northern city of Darwin hosts a U.S. Marine Rotational Force six months of each year and the U.S. is building facilities for its marines and visiting air squadrons within Australian bases.

Australia's Defence Minister Richard Marles said the presence of United States forces in Australia contributed to deterrence in the Indo Pacific region, and there would be closer collaboration on guided weapons manufacture in Australia.

Australia will begin co-manufacturing guided missiles next year, including the Guided Multiple Launch Rocket Systems (GMLRS) used in Ukraine.

Australia is also testing a Hypersonic Attack Cruise Missile (HACM) with the United States, which Australia said it will consider fielding as its first hypersonic weapon for fighter jets, the joint statement said.

"The presence of American force posture in our nation provides an enormous opportunity to work with our neighbors in the region," Marles said.

Japan would increase exercises with U.S. Marines in Darwin, while Australia and the U.S. would hold regular exercises in the Philippines exclusive economic zone, the statement said.

The statement mentioned Australia's strategic Indian Ocean territory, Cocos Islands, for the first time, saying the United States welcomed Australia's planned infrastructure upgrades there and supported Australia's completion of this work.

The Cocos Islands, with a population of 600, sits 3,000 km (1,864 miles) west of the Australian mainland and is described by the Australian Defence Force as key to its maritime surveillance operations in the Indian Ocean, where China is increasing submarine activity.

Australia has said it will start construction on an expanded airfield on the island this year, to carry heavier military aircraft, including the submarine-hunting P-8A Poseidon.

Australian Strategic Policy Institute executive director Justin Bassi said the "clarity on the threat from Beijing and support for the Philippines" in the joint statement was "vital" support for Manila.