Beijing continues to up the ante in Asia with the latest in a string of double digit defense spending increases: 11.2 percent this year, according to new figures released by China’s government.China’s official defense budgets understate actual military spending; the Pentagon estimates total Chinese defense spending at around $160 billion a year, compared to $525 billion in the Pentagon budget. China has the second largest defense budget in the world.The Chinese spending of most interest in Washington appears to be investments in ASBM (Anti Ship Ballistic Missiles). China’s growing capabilities in this branch of warfare offer the prospect of denying US ships access to waters near the mainland. That could prove important in disputes over the right of free passage in the South China Sea.For now, the Chinese spending does not threaten the military balance in the region, and going forward China has to calculate its odds not only against US forces but against countries like Japan, Australia, Vietnam and India as well. An Asian arms race would be extremely difficult for China to win — even taking its rising wealth and technological capabilities into account.Nevertheless, the growth in Chinese defense spending at a time of cutbacks in the US will cause some in Asia to wonder whether the United States can be counted on for the long haul. The “pivot to Asia” is going to cost money, perhaps more money than the Obama administration currently thinks it will need to spend.One possible avenue for US diplomacy with China: we should at least explore the possibility of naval and other arms limitation agreements. China is unlikely to overturn the military balance by spending more money; it would be in the interests of all concerned to prevent a pointless military spending race by carefully negotiated, thoroughly verifiable agreements. Tensions in the US-China relationship cannot be wished away, but managing and limiting competition could enhance the security of all countries in the region while reducing the budgetary pressures both countries face.