The former prime minister, speaking in Canberra, said Australia must be prepared to stand alone and couldn't afford to do so without a population of 50 million.

Only at that size could Australia "fund independently the defence and intelligence assets necessary to defend our territorial integrity and maintain our political sovereignty," he said, acknowledging it was "not politically correct".

"I've been attacked for this position before, I don't care. It's just an uncomfortable truth," Mr Rudd said, speaking at the launch of an essay on China, which warns that Australia has been anaesthetised by Chinese money and intimidated by Chinese blustering, leaving its response "almost too late".

The government has cut annual immigration by 30,000 to 160,000, and calls for a lower rate are coming from the left and right of politics.

Mr Rudd, who returned this week from his latest visit to China, said the debate about Australia-China relations had become "fetid".

"Australia needs a more mature approach to managing the complexity of the relationship than having politicians out-competing one another on who can sound the most hairy-chested about China on any day of the week," he said.

In the audience to hear Mr Rudd were former Labor colleagues, including Penny Wong and Kimberley Kitching, both key in Labor's foreign policy, and a couple of China-interested Liberals. They included Jim Molan, who took his seat in the Senate this week, and James Paterson, a China critic.

Federal parliament has been fixated by revelations on China - the defection to Australia of a claimed Chinese spy, the death of a Liberal Party member in March who reported being offered $1 million by Chinese influence agents and urged to stand for Parliament, and the warning from the Australian Strategic Policy Institute that universities are risking security in their links with China's defence institutions. The Australian National University has student exchanges and degree relationships with five of the "seven sons of defence" rated a "very high risk" in a new online database published by the institute on Monday.

Mr Rudd said while he had no intelligence insight on the spy claim, in his experience "not everyone who walks through the door is completely orthodox and accurate in what they say". But if Wang Liqiang's spy claims panned out, asylum should be granted, he said.

On the university links, Mr Rudd, a former ANU student, said China polices its own university campuses very carefully and Australia should do the same, with a "seamless relationship" required between universities and intelligence agencies.

Mr Rudd's speech, characterised by the self-assurance for which he is known, was a strong defence of his own government's record of standing up to China - including banning Huawei and a Rio Tinto takeover, allowing the deployment of US marines in Darwin, and boosting intelligence agency spending to combat state-sponsored terrorism, and being clear on human rights, while maintaining a balanced relationship.

That had been undone by the Coalition, which had "collapsed" aid to the Pacific in "an utterly reckless act" which had long-term security consequences for Australia, and allowing a Chinese company to take a 99-year lease on the Darwin port. Mr Rudd, fluent in Mandarin, had a dig at Mr Turnbull's "execrable Chinese" when he declared two years ago that Australia would stand up to China - a declaration that Mr Rudd said was driven by leadership pressure on Mr Turnbull from within his own party.

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Mr Rudd said China respected strength and consistency, and was contemptuous of weakness and prevarication.

Australia must maintain vigilance against threats to its democracy, but without sliding into "a populist witch hunt", he said.

"It's very easy for this to translate into a form of racial profiling. I would be the first to the barricades if the latest national security legislation becomes a vehicle for Hansonism and a return to the days of the yellow peril," he said.

Australia had become complacent on "retooling" its economy, on climate change and on "the profound geopolitical challenges now washing over us".

It should become a champion of the Pacific and its concerns about climate change, he said. It should boost trade with Japan, Africa, Europe and elsewhere to reduce reliance on China, as well as consolidate its alliance with the US and join the Association of Southeast Asian Nations. And it should be prepared to stand alone on defence and intelligence, he said.