After a three-day special ASEAN summit, the leaders of Australia and Vietnam have agreed to upgrade their relationship amid Canberra's effort to diversify its supply chains away from China.

A press release from the Australian side says the "Comprehensive Strategic Partnership" will increase diplomatic cooperation on a raft of issues. They include climate, defense and security, economic engagement, education, and environment and energy.

Australian Prime Minister Anthony Albanese said, "Working together as Comprehensive Strategic Partners, I am confident that Australia and Vietnam can rise to meet the challenges of today and tomorrow."

The move follows a multimillion-dollar agreement signed last June in Hanoi to decarbonize Vietnam's economy with Australia's help.

Vietnam has been involved in ongoing disputes with China over the latter's territorial expansion in the South China Sea. On Tuesday, Chinese coast guard ships fired water cannons at a Philippine supply vessel, injuring four Filipino crew. The topic of China overshadowed political discussions throughout the recent ASEAN summit.