Australia Prime Minister Scott Morrison wants the international community to be more flexible in forging relationships with other countries.

In an address to the British Policy Exchange, Morrison poked at continuing tensions between China and the U.S. - which he claimed were forcing other countries to choose sides.

The prime minister's virtual address Tuesday was made after he was awarded the inaugural Grotius Prize for his work in the international community. Morrison encouraged the world's largest powers to have "greater latitude" and to accommodate the interests of allies and partners.

Morrison said countries shouldn't be given "binary choices" when it comes to forging new partnerships. He outlined the challenges Australia had faced - particularly with its fragile relationship with China in an era of escalating political competition.

He said apart from Australia, countries in Europe and elsewhere faced the same problem. Morrison said Australia wanted to have open and transparent relationships with both China and the U.S.

Morrison praised the U.S. for its "liberal democratic values" and "market-based economic model" and China for its "strong people-to-people ties" and its "shared interest in regional development." The prime minister welcomed China's economic rise - which had been advantageous to the world economy.

Morrison is concerned about the difficulty for "middle-power" countries to navigate the complex and nuanced interests of both the U.S. and China.

"Our actions are wrongly seen and interpreted by some only through the lens of the strategic competition between China and the United States - it's as if Australia does not have its own unique interests or views as an independent sovereign state," Morrison said.

Morrison said assumptions had been made of Australia's recent actions as a result of false interpretations of its attempts to forge stronger ties. He claims these have deteriorated relationships - even though it was not the country's intent.

In recent months, tensions between Australia and China have escalated, resulting in the imposition of tit-for-tat measures. Last week, China warned that it will no longer be entertaining calls from Australia if it does not stop treating the country as a strategic threat.