Lots of reports say that Chinese military spending has exceeded our own if you account for their cheaper cost of labor and material goods.
China also recently (just days ago) flew two new sixth gen fighters. The US has yet to demonstrate one.
The tactical move for the West to counter is to move as much manufacturing as possible to other countries (Vietnam, India, Mexico) and hope that can put a dent in China's manufacturing flywheel. The Chinese consumer economy isn't robust enough to absorb all of the goods they manufacture (at least not yet), and without buyers the system would need to be scaled back.
Even if China was 100% a friend, you wouldn't want one country with this much outsized control over manufacturing. In the future this will be better distributed.