The former prime minister says the economic disruption that would arise from a war over Taiwan would be hard to conceive and make COVID-19 look like a headache.
"In terms of the geo-strategic economic implications of what would occur in Taiwan versus Ukraine? Well, it's a factor of 50," he told UK media during a visit to London.
A new poll shows Australians remain wary of conflict in the region.
Many have welcomed the resumption of diplomatic contact after a years long freeze under Mr Morrison's administration, Lowy Institute polling and research has found.
But the superpower and its president Xi Jinping continue to wallow near the bottom of Australians' trust lists, despite a majority believing China acted responsibly in the world five years ago.
Lowy Institute director Michael Fullilove believes Australians' sharply declining perceptions of China have levelled out as the relationship between the two countries stabilised.
China lifted timber and coal import restrictions following a diplomatic shift by the new Labor government and the percentage of Australians who consider China as more of an economic partner has increased.
After being burnt by trade sanctions worth $20 billion, seven in 10 want leaders to seek out trade deals with "friendly" nations even if it means higher prices.
A slight majority still perceive China as a security threat as opposed to an economic partner, although the threat perception has dropped 11 points from 63 per cent a year ago.
But three in four Australians continue to believe it's "very" or "somewhat" likely China will become a military threat to Australia in the next 20 years.
The poll revealed a "sober optimism" in Australians' outlook on the world after years of global turmoil, Dr Fullilove said.
"But there has been no return to factory settings."
More than six in 10 consider the prospect of a military conflict between the United States and China over Taiwan a critical threat.
While wholly supportive of the US alliance, Australians are wary that being part of the pact could draw the nation into war in Asia.
In the event of a military conflict between the US and China, 56 per cent of respondents said Australia should remain neutral despite eight in 10 viewing the alliance as important to national security.
Australians would also favour a hands-off approach should China invade Taiwan, with 80 per cent supporting accepting Taiwanese refugees and three quarters being in favour of slapping economic and diplomatic sanctions.
A lesser majority would support sending military supplies or using the navy to prevent China from imposing a blockade around Taiwan, but Australians were against sending troops to help defend the island from a Chinese incursion.
Tibet's president-in-exile Penpa Tsering said the Chinese government's flash points with India, Taiwan and in the South China Sea shows its insecurity.
"If there is a threat to the survival of the Communist Party, they will definitely attack one of these places," Mr Tsering told the National Press Club on Wednesday.
"Until then, I don't see China having the guts to venture into militarism because what really matters for China is economy."
In a rubber stamping of Prime Minister Anthony Albanese's work on the international stage, 83 per cent of Australians have approved of his job handling foreign policy - the highest score out of the past five leaders.
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