Australian Prime Minister Anthony Albanese is under pressure to directly engage with Chinese President Xi Jinping after a Chinese fighter jet's dangerous maneuver near an Australian Navy helicopter in international waters.

The encounter involved a Chinese jet releasing flares near an Australian Seahawk helicopter over the Yellow Sea, escalating tensions with China accusing the Australian craft of provocative proximity to its airspace.

In retaliation to perceived aggressive actions by China, Australia plans to boost its defense budget by $50 billion over the next decade to address increasing regional conflict and China's coercive measures.

The United States, through assistant secretary of state Daniel Kritenbrink, has labeled China's regional conduct as increasingly aggressive, voicing serious concerns over the recent aerial confrontation.

The incident may influence diplomatic relations and is set to be a topic of discussion between Prime Minister Albanese and Chinese officials at upcoming G20 and APEC summits, amid calls for a firmer Australian stance on China.