In an interview in Sydney, the chair of the US House foreign affairs committee said the Australian manufacture of the cutting-edge weapons provided an example of how streamlined licensing of sensitive US defence technology, and licence exemptions on 70 per cent of defence exports to Australia from September 1, would help the US compete with China in developing advanced weapons.
Hypersonic missiles, which travel in the upper atmosphere more than five times faster than sound, were tested by China in 2021, prompting a technology race with the United States.
Their recent use by Russia in the Ukraine war sparked concern among members of NATO.
A Chinese hypersonic weapon "could hit Australia in a matter of minutes and Australia cannot stop that right now, so we need to catch up to that", McCaul said on Friday.
"I was at a hypersonic company just yesterday and we want to move towards co-production," he said.
"It is already starting and that is the exciting thing and it will help relieve the stress that we see on the defence industrial base."
Australia is testing a Hypersonic Attack Cruise Missile with the United States, which it will consider as its first such weapon for fighter jets, the defence and foreign ministers of the two countries said after talks last week.
McCaul said his visit focused on the AUKUS partnership with the United States and Britain to transfer nuclear-powered submarines to Australia, as well as develop other advanced defence technologies.
The AUKUS alliance was an example of a US ally spending more on its own defence, he said, when asked if a re-elected Donald Trump would continue to back a growing US defence posture in Australia, and the sale of US nuclear submarines next decade.
AUKUS talks had started under the Republican Trump presidency, he said.
"I think there will be strong support for it," McCaul said.
Rotations of US nuclear submarines through Australia under AUKUS are a deterrent factor in the region, where the Philippines is under pressure from China in the South China Sea, he said, after visiting the Philippines.
"Chairman Xi, I think, fears this alliance more than anything else because he knows what it means - it means that nuclear submarines will be rotating, but also these innovative technologies that we have," he said, in a reference to Chinese President Xi Jinping.
In Beijing this week, the Chinese foreign ministry said AUKUS "harms efforts" to keep the region peaceful and secure and exacerbated the arms race.
