Australia has unveiled a radical shakeup of its defense spending billed as the most significant review of its military preparedness since World War II, shifting its emphasis onto long-range strike capabilities and building munitions at home.

Launching the Defense Strategic Review in Canberra, Prime Minister Anthony Albanese said his government’s strategy was designed to make Australia more self reliant, more prepared and more secure.

“We cannot fall back on old assumptions. We must build and strengthen our security by seeking to shape the future rather than waiting for the future to shape us,” Albanese said.

The review examined billions of dollars committed by the previous government and reassessed their value against perceived threats, including from an increasingly muscular China under leader Xi Jinping.

Though the unclassified version of the report didn’t include confidential assessments of specific threats, it noted that Australia’s largest defense ally, the United States, is “no longer the unipolar leader of the Indo-Pacific”.

“China’s assertion of sovereignty over the South China Sea threatens the global rules-based order in the Indo-Pacific in a way that adversely impacts Australia’s national interests,” the review said.

The highest level of strategic risk that Australia now faces is the prospect of a major conflict in the region, the review added, suggesting a strategy of greater self-sufficiency combined with stronger relationships with its allies and key powers in the region, including Japan and India.