The world is 'sorting itself' into two coalitions headed by the US and China

The Australian's Foreign Editor Greg Sheridan says the world is "sorting itself out" into two coalitions, one headed by the United States while the other is headed by China.

The remarks come after Mr Morrison addressed the nation with a major foreign policy speech ahead of his trip to Cornwall for the G7 Summit.

"The real guts of Morrison's speech was the part where he was talking about democracies cooperating economically as well as strategically," Mr Sheridan said.

"What I think is happening, but who knows if it's going to follow through, is the world is sorting itself out into a US-led coalition and a China-led coalition.

"The US-led coalition is mainly democracies but with some sort of fellow travelling authoritarian regimes like Vietnam.

"The Chinese system is overwhelmingly authoritarian systems, Russia, Iran, and North Korea are in the Chinese camp."

Mr Sheridan said the way Australia will deal with China's trade coercion was to "trade less" with China and to develop "alternative trade markets".

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