The U.S. Secretary of Defense accused China of building up its armed forces despite the fact that there is no military threat to China. The U.S. calculates that China has the third largest defense budget on the planet, second only to America (which accounts for about half the total defense spending on the planet) and Russia. China responded by pointing out the size of the U.S. defense spending, and the need to deal with the threat from an independent Taiwan. Moreover, official documents, and the popular press in China has, for years, discussed the "coming war with America."

The consul for political affairs at the Chinese embassy in Australia is trying to defect, but Australia won't grant him political asylum. The consul, Chen Yonglin, says his job was maintaining a large espionage network in Australia, and supervising kidnappings and other disciplinary measures against Chinese living in Australia. Under pressure from China (and threats of economic retribution), Australia has refused Chen asylum, but have not yet turned him over to China (which insists that Chen simply wants to stay in Australia).