The United Kingdom must be "match-fit for a more competitive world", the Prime Minister said as he set out the Integrated Review.
The report includes a plan to increase the country's nuclear stockpile and it is expected to see Britain look towards the Indo-Pacific region as the world's "geopolitical and economic centre of gravity" moves east.
However, the document also highlighted that Russia remains the "most acute threat to our security".
In his foreword to the Integrated Review Of Security, Defence, Development and Foreign Policy, Boris Johnson said Brexit marked a "new chapter in our history" and the UK was now "open to the world, free to tread our own path".
"Few nations are better placed to navigate the challenges ahead, but we must be willing to change our approach and adapt to the new world emerging around us," Mr Johnson writes.
"Open and democratic societies like the UK must demonstrate they are match-fit for a more competitive world."
Following the Integrated Review's publication, the Prime Minister said the Integrated Review is a "vital instrument" in helping fulfil the Government's vision for the future.
"The overriding purpose of this review, the most comprehensive since the Cold War, is to make the United Kingdom stronger, safer and more prosperous whilst standing up for our values," he continued.
The strategy acknowledges the risks posed by increased competition between states, including a more assertive China, along with terrorism, organised crime, climate change and the "realistic possibility" of another pandemic.
The increased focus on the Indo-Pacific region is an acknowledgement of Chinese influence, as well as the importance of countries including India and Japan.
The shift will be underlined by the deployment of HMS Queen Elizabeth's Carrier Strike Group to the region on its maiden operational mission later this year, and a visit by Mr Johnson to India in April.
While there has been some pressure from Conservative backbenchers to take a tougher line with Beijing, the language used in the Integrated Review highlights the need for continued cooperation between countries.
"We will invest in enhanced China-facing capabilities, through which we will develop a better understanding of China and its people, while improving our ability to respond to the systemic challenge that it poses to our security, prosperity and values – and those of our allies and partners.
"We will continue to pursue a positive trade and investment relationship with China, while ensuring our national security and values are protected.
"We will also co-operate with China in tackling transnational challenges such as climate change."
What does the Integrated Review set out?
The Integrated Review warns of a "deteriorating security environment" in the world and it points out that the proliferation of chemical and nuclear weapons, advanced conventional weapons and "novel military technologies" are likely to "increase the risk and intensity of conflict".
The report also said that there is a "realistic possibility" that a terrorist group will launch a successful chemical, biological, radiological or nuclear (CBRN) attack by 2030.
In terms of defence spending, the Integrated Review will shift away from traditional military hardware, saying that "the advantages offered by high-tech capabilities may be eroded by affordable, easily-available, low-tech threats such as drones and improvised explosive devices".
In response to the "evolving security environment", the Government will lift a cap on the number of nuclear warheads in the UK arsenal.
The original commitment to have no more than 180 warheads by the mid-2020s has been modified to accommodate up to 260, but the public will not be given figures for the operational stockpile or how many missiles and warheads are deployed.
A new state-of-the-art counter-terrorism operation centre will be created to streamline the response of police and intelligence agencies in the event of an attack.
There will also be a new "situation centre" in the Cabinet Office similar to the White House situation room where former US President Barack Obama was able to watch the US special forces operation to kill Osama bin Laden in real time.
The document highlights the UK's aim to be a "science and tech superpower" by 2030, with the ability to "monitor, protect and defend our interests" in space and ensuring cutting-edge defensive and offensive cyber capabilities.
It also commits to return to spending 0.7% of gross national income on overseas aid "when the fiscal situation allows".
It states that tackling climate change and biodiversity loss is the Government's "number one international priority" in 2021 and beyond.
On 22 March, the Defence Command Paper will be published, and is expected to contain further details about the future of defence.
For more discussion on the Integrated Review, click through to this week’s episode of the Sitrep Podcast.