CANBERRA, Aug. 31 (Xinhua) -- Australia must develop a foreign policy to accommodate China and the globalizing modern world, former Australian Prime Minister Paul Keating has said.

Keating, who was in office from 1991 to 1996 and currently sits on the advisory council for the China Development Bank, told the Australia China Relations Institute that Australia's global influence was "waning" and the government should shift its foreign policy to reflect "seismic shifts" in global power over the last 20 years.

He said the Australian government must fully realize it is not the global power it once was, as the rise of Asian nations such as China, Japanand India was going to naturally lower the influence of a small, Western nation of just 24 million people.

"The fact is Australia needs a foreign policy and it needs it urgently and Australia does not have a foreign policy, that's the biggest problem," Keating said on Tuesday night.

"We both need and deserved a nuanced foreign policy which does take account of these big seismic shifts in the world."

Keating said Australia had to realize it was becoming a "much more marginal power" than it was 20 years ago, but added there was much to gain by stepping back and being "more interested" in the development of China.

"Our influence is waning and therefore I think we should be more interested in the world around us," he said.

Keating added that Australia should not put "all its chips" in the relationship it currently holds with the United States, as Washington does not have the total global influence it once had.

Keating was a Labor prime minister who was succeeded by John Howard in 1996.