U.S. President Barack Obama and Australian Prime Minister Julia Gillard announced U.S. Marines will be stationed in Australia's Northern Territory.

The initial contingent next year would only be about 250 troops and eventually grow to a force of about 2,500. It's small to be sure, but the message it sends to the region's superpower, China, is larger: The United States, despite its current economic troubles, remains a force in Asia and retains its defense commitments to allies.

"As we end today's wars (in Iraq and Afghanistan), I have directed my national security team to make our presence and missions in the Asia Pacific a top priority," Obama said.

"As a result, reductions in U.S. defense spending will not -- I repeat, will not -- come at the expense of the Asia Pacific."

Beijing was not amused.

"It may not be quite appropriate to intensify and expand military alliances and may not be in the interest of countries within this region," China's Foreign Ministry spokesman Liu Weimin said.

The U.S.-Australia pact comes amid increased concerns over China growing military strength and assertiveness. Its standing ground force is about 1.25 million soldiers. Its navy is comprised of about 75 principal combat ships, more than 60 submarines, 55 medium and large amphibious ships, and roughly 85 missile-equipped small combatants, according to the U.S. Defense Department. It is also building an air craft carrier.

China's air force has 490 combat aircraft. The country's military also has short-, medium- and long-range ballistic missiles.

"China is rapidly modernizing its military but with a troubling lack of transparency, coupled with increasingly assertive activity in the East and South China Seas," U.S. Defense Secretary Leon Panetta said.

In contrast, Australia has fewer than 85,000 active-duty and active reserve personnel, fewer than 100 ships -- including auxiliary vessels -- and a similar number of combat aircraft.

The United States has about 85,000 troops stationed in the Pacific and seven aircraft carriers based in the Pacific.

China's military focus in the past has been on Taiwan, but in recent years other regional interests have risen. Chief among them is the Spratly Islands, which China claims as a whole as its own by virtue of history.

At first glance, the Spratlys would appear an unlikely bone of contention between Beijing and other Asia-Pacific countries -- all allies of the United States. The Spratlys are 750 largely uninhabited islands, reefs and atolls spread across an expanse of the South China Sea.

But oil has been discovered in the Spratlys -- no small allure for China with its burgeoning industrial economy. China's Geology and Mineral Resources Ministry reportedly estimates the Spratlys hold 7.7 billion tons of oil and natural gas reserves, more than that of Kuwait. The first major discovery of hydrocarbons was made by the Philippines in 1976.

A number of incidents between China and other claimants have occurred since 1988, when China and Vietnamese forces skirmished over the Spratlys' Johnson South Reef.

Recently Manila has reportedly complained of seven incidents with China, including incursions into its territorial waters by Chinese fishing boats.

The United States, which says it is neutral in the territorial disputes, promised this week to bolster the Philippines' naval defenses. Washington has sold one refurbished naval cutter to the Philippines and Manila is expected to receive another next year.

Although China is Australia's largest trading partner, Beijing's military development and aggressiveness is a cause of concern for Canberra.

In addition to the basing of Marines in Australia, U.S. planes will more frequently rotate in an out of the Northern Territory and its capital, Darwin.

"This deepening of our alliance sends a clear message of our commitment to this region, a commitment that is enduring and unwavering," Obama said this week.