SYDNEY, July 24 (Reuters) - Australia's former Prime

Minister Scott Morrison, testifying at a U.S. Congress panel

hearing about countering China, has urged the U.S. to "double

down" on its economic engagement in the Indo Pacific where

Beijing is asserting influence.

Speaking on Wednesday, Morrison said economic security is

the main security focus of many countries in Southeast Asia, and

U.S. leadership on economic issues and Western investment gives

the region choice.

"When China is active in a particular country ... the

response to that is not for the U.S. or other allied interests

to not be there, the response is to double down and be there

even more strongly to provide them with that choice," he said.

Morrison was invited to speak to the Select Committee on the

Strategic Competition Between the United States and the Chinese

Communist Party about his government's experience of China

imposing $20 billion in unofficial trade sanctions after

Australia called for an inquiry into the origins of the COVID-19

pandemic in 2020.

The sanctions were lifted by Beijing after Morrison lost a

national election in 2022, and Anthony Albanese's Labor

government sought to stabilise ties with Australia's largest

trading partner.

Morrison said the U.S. should work more with its Quad allies

including Australia and Japan to build a supply chain for

critical minerals and rare earths needed for defence equipment,

including the nuclear-powered submarines Australia is buying

from the United States under the AUKUS pact.

"The processed rare earths, whether they go into nuclear

submarines, F-35s or whatever it happens to be, that is

essential for those things to be done," he said.

Deals similar to that struck this month for the U.S. Department

of Defense to back U.S.-based rare earth magnets producer MP

Materials ( MP ) "should be extended to allies and partners", he

said.

China recently demonstrated its leverage by withholding exports

of rare earth magnets, upending global markets, before reversing

course.

The Australian public awareness of the potential threat

posed by China is "somewhat in jeopardy", Morrison said,

pointing to a Lowy Institute poll showing more Australians see

China as an economic partner than a security threat.