The nation’s military spending is lower than the world’s average, and far below the US defense budget. China has no appetite for external expansion for an arms race, but for the sake of its own safety, it should properly increase the spending on defense as the national economy grows.

Despite China’s economic slowdown, the Chinese government has plans under its "Made in China 2025" program to spend $300 billion by 2025 to become self-sufficient in critical technologies and strategic emerging industries. U.S. unease at the size and opaqueness of China’s large military buildup are well-known. The latest developments will likely lead the Trump administration to continue efforts to reduce Russian defense technology transfers to China, sustain the EU arms embargo on China, and make U.S. weapons and other U.S. exports more competitive in global markets.

Physically, THAAD serves as an Iron Curtain to intercept incoming missiles from North Korea. Separate national security interests have supplanted Cold War ideology, but THAAD could influence competing alliances and block cooperation among the countries involved in the “Six Party Talks.”

The sea issue is a stumbling block in China-US relations, but it’s not clear that the new president sees it as more important that the RMB exchange rate or other issues in the bilateral relationship. In that case, “freedom of navigation” there could be used by Trump as a bargaining chip in negotiations about issues that concern him more.

Despite three major obstacles -- U.S. arms sales to Taiwan, close-in reconnaissance and discriminatory laws – a review of China-US military contacts in 2016 suggests that the armed forces of both countries are determined to sustain a relationship despite recurring tensions. Promoted by top-level policies, the two sides should maintain close communication, increase practical cooperation, and manage differences and contradictions.

The Trump administration has been surprisingly brusque with demands that NATO allies meet their financial defense targets quickly. However, the US push for more military spending by European allies is less about European security than about freeing up more of Washington’s own resources to deal with issues in Asia.

Different from the earlier narrative that China was free-riding from U.S. war efforts in Afghanistan, more recent developments have focused on China’s expanding political involvement, deepening security ties, and economic investments in Afghanistan. However, the description of China as the largest, and potentially, the most influential player in Afghanistan is misleading.

Sending the first US aircraft-carrier combat group to patrol the South China Sea since the Philippines arbitration has unsettled the region. The US military should promote new trust-building with its Chinese counterpart, and the administration can ease tensions with a clear statement on sovereignty over South China Sea features.

Having enjoyed the fruits of globalization as it has built its strong economy, China has assumed more responsibility in the world. Its military operations overseas have been humanitarian in nature, from disaster relief, peacekeeping, countering piracy and evacuation of personnel. China’s neutral but all-round approach to the Syrian issue, when it has no self-interest, suggests how a stronger China might act in the days to come.

The recent Lotte crisis is a recurring incident in East Asia’s power dynamic: one country wields economic weapons to score geopolitical goals against another. In a region where China and U.S. lack strategic trust and security cooperation, everyone stands to lose when economics and geopolitics get tangled. Keeping the two in separate dimensions and preventing risks from one realm spilling over into the other are imperative.