Australia's strong defence networks have helped make it the sixth most powerful nation in Asia.
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The United States remains the dominant power in Asia, ahead of China.
Japan, India and Russia rank next in the Lowy Institute's Asia power index.
China's isolation during the COVID-19 pandemic significantly impacted its standing, leading Washington to remain ahead mainly off the back of Beijing's setbacks.
Washington's military capability remains significantly ahead of Beijing and Moscow.
China's economic relationships have stayed markedly in front while its diplomatic influence has eclipsed that of the US.
Being the best-performing middle power during the pandemic helped boost Australia's ranking, while Canberra is punching above its weight when its power is compared to its resources.
Australia also had its greatest diplomatic improvement, rising to fifth overall.
"Australia's rising diplomatic influence score reflects greater confidence ... in the ability of the new Albanese Labor government to advance Australia's interests, as compared to the previous Morrison coalition government," the report says.
India was found to underperform compared to the number of resources it has.
The strengths of 26 Indo-Pacific nations were assessed against 133 indicators, with groupings including military and economic capabilities, defence networks and diplomatic and cultural influences.
The US scored 81, China 72.5, Japan 37, India 36, Russia 32 and Australia 31.
South Korea, Singapore, Indonesia and Thailand rounded out the top 10.
Papua New Guinea ranked last with a score of 3.3.
Australian Associated Press
