Acting Prime Minister Richard Marles says the world "would breathe a sigh of relief" once the situation in Taiwan de-escalates.
It comes after tensions have heightened in the Taiwan Strait in recent days after .
The drills, which included the launch of ballistic missiles, came after .
While China said it had finished the military drills, Mr Marles said the global community wanted a return to calm in the Taiwan Strait.
"The world would breathe a sigh of relief if we could get to that moment," he told Sky News on Sunday.
"From Australia's point of view, we've been calling for a de-escalation, intentions which has been underpinned by our position of not wanting to see any unilateral changes to the status quo across the Taiwan Strait."
Mr Marles said Australia still sought out a stabilising of the relationship with China.
However, he acknowledged there would still be challenges.
"What we have sought to do is really change the tone in the way in which we are engaging with the world, but that includes the way in which we engage with China. We're not going about things with chest-beating," he said.
"What we are really trying to speak with a considered voice in a manner which is professional, which is sober and which is diplomatic."
The acting prime minister said the broader region would be critical to Australia's national interest.
It comes after earlier this week.
In the speech, Mr Xiao said China would still pursue reunification with Taiwan.
"But we cannot, we can never rule out the option to use other means, so when necessary, when compelled, we are ready to use all necessary means," he said.
"As to what does it mean, 'all necessary means'? You can use your imagination."
Mr Marles said Australia's stance on the One China policy remained the same.
"We're not wanting to see any changes to that. But it is really important that we get back to that normal, peaceful set of behaviours," he said.
