Anxiety Over China's military buildup

While the U.S. is heavily engaged with China economically, the Chinese military buildup is in full swing, announcing an unprecedented 18% increase in the official defense budget last week.

What this means is heightened regional anxiety and potential ammunition for isolationists in the U.S. Congress for more trade protection.

As the great British economist historian Niall Ferguson wrote, China and the U.S. are now tightly linked in a symbiotic relationship which has been fueling global growth and bolstering international financial markets. For better or for worse, this "Chimerica" relationship is a reality whose undermining will have huge, negative consequences for the world economy and the living standards for billions of people.

Is China playing smart here by taking the U.S. economy hostage? Can they get away with such rapid and unaccountable military buildup? How should the U.S. respond?

The level of anxiety is certainly due for a major rachet-up as the U.S. and China get even closer economically.