Marine Corps Commandant David Berger said Washington and Canberra would need "everything in the cupboard to prevent a conflict".
"We can't slow down, we can't back off, we can't get comfortable," he told an Australian Strategic Policy Institute briefing.
"The risk then is the other side moves a half step and we've lost the deterrent value that we're after in the first place."
His comments come after a four-star US Air Force general wrote a memo warning of an all-out war with China within the next two years.
The Pentagon sought to distance itself from the comments, saying they didn't reflect the department's view.
Defence Minister Richard Marles said Australia would continue to pursue a reduction in tensions and a path to peace in the region.
"Specifically in respect of Taiwan, what that means is that we stand for the proposition that there should be no alteration to the status quo across the Taiwan Strait," he told ABC radio.
"The starting point of that is to make sure that we are active in our diplomacy and that's what we've been doing.
"But it's also about making sure that we get the hard power equation right from an Australian point of view, and we're doing that as well."
The government is poised to announce its choice of a US- or British-designed nuclear-powered submarine as part of the trilateral AUKUS agreement between the three nations.
The pathway to receiving the submarines and a plan for plugging interim capability gaps will be made public in March.
Mr Marles and Foreign Minister Penny Wong are meeting with their counterparts in London, where the future of the AUKUS alliance will be on the agenda.
The pair will also meet with new prime minister Rishi Sunak.
Mr Marles said Australia welcomed a greater presence from Great Britain in the Indo-Pacific, adding it would be important for stability in the region.
He also hosed down speculation the submarine delivery timeline would be delayed after the US suddenly shut down four repair docks for maintenance.
"We certainly understand the size of the challenge for all three countries and there is an ambitious timeline that will be articulated when this announcement is made," he told Nine's Today program.
Mr Marles is due to meet with his US counterpart Lloyd Austin later this week.
21°C