China is capable of a direct missile strike on Australia and the threat is growing as Beijing amasses long-range and hypersonic weapons and builds islands in the South China Sea, an Australian think tank said on Sunday.

A Lowy Institute report found the main threat to Australia was from Chinese missiles fired from ships, submarines and a new intermediate-range ballistic missile that could reach the island continent from China.

China’s capacity to strike Australia would grow over the next decade as “the DF-27 intermediate-range ballistic missile, and potentially a conventionally armed intercontinental ballistic missile, grow in service numbers”, it said.

The DF-27 missile has a range of 5,000km to 8,000km (3,000 miles to 5,000 miles), the US military said in December.

The direct military threat posed to Australia was not well understood by the public, the report said, adding that it was assessing Beijing’s capability and not its intentions.

Sam Roggeveen, the director of the Lowy Institute’s International Security Program, told Agence France-Presse the report was “neither hawkish nor dovish, neither alarmist nor complacent”.

“I think the growth of the People’s Liberation Army is the most important thing to happen to Australian security since the collapse of the Soviet Union, and there is a pressing need for a more informed Australian discussion about it,” he said.