WASHINGTON is watching Beijing's military build-up and will make adjustments to its capabilities in this region if necessary, the United States defence chief Robert Gates said.

He was speaking to journalists at a roundtable discussion on the sidelines of the Shangri-La Dialogue yesterday.

Sharing his views on China a bit more candidly than he did in his address at the annual gathering of defence officials on Saturday, he said Washington's concern over China's military expansion was more 'of the kind of things they were building than of numbers'.

While he did not elaborate on what these were, recent reports have hinted at Washington's concerns over the revelation that Beijing had built a massive new naval base in Sanya, on Hainan Island.

The strategically located base, which features underground facilities, according to Newsweek, provides the Chinese Navy with hard-to-monitor deep-water access to the South China Sea and the Indian Ocean region.

It also gives it the ability to project military power in and around trade routes considered vital to all Asian nations.

There have been other developments which prompted Mr Gates' comments that the US will respond 'as necessary' to China's strategic modernisation programmes. And he refused to accept Beijing's assertion that its ballistic missiles should be regarded as defensive rather than offensive weapons.

The relationship between the US and China and their military capabilities are subjects of close scrutiny among analysts and officials.

Mr Gates' predecessor Donald Rumsfeld caused a stir some years ago at the Dialogue when he accused China of threatening Asia's security balance with its growing arsenal.

Mr Gates, however, nudged bilateral tensions a notch lower at last year's security meeting when he said there was 'reason to be optimistic', given increased military-to-military dialogue and growing trade ties.

At Saturday's forum, he referred to China's 'valued cooperation' in helping to contain North Korea's nuclear programme and a new hotline allowing for quick consultation between officials from both nations. But there were hints that China could do more.

Mr Gates urged countries engaging in military modernisation to be open, citing the advance warning given by Washington before the US military shot down a dysfunctional space satellite in February.

While he did not elaborate, this was an apparent move to draw a parallel with China, which destroyed a weather satellite in January last year without prior warning.

Yet, talking to journalists yesterday, he said he hoped that the 'relationship evolves in a way that it involves transparency on both sides'.

This would lead 'to a better understanding of intentions and long-term strategies', he said.

Senior officials in Washington have repeatedly expressed concern over China's military build-up. Brigadier General Jeffrey Horne of the US Strategic Command said last month that Beijing has 'aggressively' honed its ability to shoot down satellites, along with other space and counter-space capabilities.

Washington has also expressed concern over the increase in military spending. Beijing in March said its defence spending would rise 17.6 per cent this year to 417.8 billion yuan (S$81.8 billion).

China's representative Lieutenant-General Ma Xiaotian, who is deputy chief of general staff of the People's Liberation Army, explained on Saturday that the rise in spending was a result of its economic growth.

'Notwithstanding the vicissitudes of the international situation, China will always adopt a defensive defence policy,' he said.

'We are not engaging in an arms race. We are a military threat to no other country. We shall never seek hegemony or expansionism,' he told the forum.