Renowned economic historian Niall Ferguson says China is making an example of Australia to highlight the dangers to other Asian economies of challenging its power, underscoring the need to cement relations with the incoming Biden administration to ensure Canberra isn't isolated amid deepening trade tensions.

He warned that what he terms Cold War II will not end with the exit of US President Donald Trump from the White House, warning the election of Joe Biden will not lead to a wholesale reversal of the more assertive approach to dealing with China's rise as an economic and military challenger to the US.