From an SMH article titled; Rice and Downer in talks on how to contain China ;

China's military spending is a serious concern for the United States, and the Secretary of State wants Australia, Japan and the US to establish a joint position on how to engage China "about security in the region".

The article continues;

Condoleezza Rice gave this candid assessment before trilateral talks with the Foreign Minister, Alexander Downer, and Japan's Foreign Minister, Taro Aso, in Canberra next week. ...

Her comments are at odds with previous statements by Mr Downer, who has said that these ministerial meetings were not aimed at developing a China "containment" policy.

Australia has adopted a hole in the ground economy , much like the sheep's back of the 1950s were increasing demand for a commodity was the basis for an extended period of prosperity. Chinese and Indian demand for our extraction products have been behind the economic wealth of the last decade in Australia.

But why is the US so concerned about Chinese conventional military? Maybe it needs a bogeyman to justify the big budgets it forces on its taxpayers. The US could cut its military expenditure by 75% and still outspend China by a 2:1 ratio ;

• 466B - USA
• 65B - China
• 50B - Russia
• 46.5B - France
• 44.7B - Japan
• 38.8B - Germany
• 31.7B - UK
• 20.8B - South Korea
• 20.2B - Italy
• 18.3B - Saudi Arabia
• 17.38B - India
• 13.4B - Brazil
• 9.7B - Iran
• 9.3B - Australia

Australia in 2005 spends about 17B AUD on defence. With the US dollar being weaker these days, that is only about 25% less in USD.

Another way to look at the US defence budget is that inside their 11 trillion GDP, they are spending approx the productivity of a western nation of twenty million people on defence. The defence budget of the US with emergency spending added in, is nearly equal to the GDP of Australia. Essentially, the United States spends the productive output of Australia on defence.

An article in Foreign Policy by Minxin Pei argued that China's instability was political, not economic. Pei writes;

To most Western observers, China's economic success obscures the predatory characteristics of its neo-Leninist state. But Beijing's brand of authoritarian politics is spawning a dangerous mix of crony capitalism, rampant corruption, and widening inequality.

Dreams that the country's economic liberalization will someday lead to political reform remain distant. Indeed, if current trends continue, China's political system is more likely to experience decay than democracy.

But this ignores the economic success of authoritarian nations like Singapore and Malaysia. Even Japan has essentially been a one party government for most of its recent history. Singapore, Malaysia and Japan have not felt any destabilisation despite the authoritarian nature of Asian-capitalism popularised by Japan in the 1960s.

The other side of the coin is Indonesia who practised the authoritarian form of Asian-capitalism with Suharto family corruption and cronyism thrown in. The Indonesian people overthrew the Suharto regime and Indonesia has been making remarkable strides since as a democratic nation practising a market economy.

So what is the US trying to contain? I suspect it may be attacks on their defence spending and defence budget. While Australia needs to spend more on defence, the US could do with a budget cut.

cam

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