China has been astute in improving its relations with other Asian states in many ways. It has courted neighbours with favourable trade deals and, increasingly, with aid, investment and its flow of outbound tourists.

While China has piled up huge trade surpluses with the United States and Europe, and a smaller but still substantial imbalance with New Zealand, most of its Asian partners are pleasantly surprised to find they are selling much more to the dragon economy than they are buying.

The big flaw in China's courtship of Asia is its military build-up and the widespread perception that it may be designed to displace American power with Chinese hegemony. Just last month, Beijing unveiled another increase (of nearly 18 per cent) in annual defence spending. It insists that a lot of the rise will go towards better pay and conditions for its 2.2 million military personnel.

However, Japan, India and other wary neighbours also observe the progress of China's military modernisation and its acquisition of submarines, warships, aircraft, missiles and other weapon systems that enable it to project power much further away from its shores.

Since China has longstanding disputes over land or sea territory with India, Japan and several Southeast Asian nations, as well as Taiwan, it is hardly surprising these countries suspect Beijing will one day be tempted to enforce its claims with military muscle.

So China's moves in defence diplomacy are watched closely by its neighbours.

After a lamentably slow start, the Chinese armed forces are becoming a bit smarter.

They have been exchanging regular officer visits with Asian countries, holding bilateral training exercises and taking part in some regional security talks.

There has been a striking increase in China's participation in United Nations peacekeeping operations.

The most recent addition to the outreach programme was evidently intended to send the message that China is ready to be a significant player in regional military co-operation, just as it is in diplomacy, trade and investment.

For the first time ever, the Chinese navy joined a multinational maritime exercise last month. It sent two missile-armed frigates to take part in counter-terrorism training in the Indian Ocean with ships from seven other nations.

The operation used Nato instruction manuals and English as the language of command, which suggests the Chinese navy is keen to become increasingly involved in interacting with counterpart forces that communicate in English.