Australia on Sunday sought to play down comments by a senior US official who said Washington planned to raise concerns about Canberra's falling military spending at talks this week between the allies.

Australia slashed Aus$5.5 billion (US$5.7 billion) from its defence budget in May in a bid to return the economy to surplus, despite a beefed-up US alliance that has seen hundreds of Marines deployed to northern Australia.

The expansion in ties, announced by US President Barack Obama on a visit to Australia 12 months ago, is part of Washington's pivot to Asia to counter China's growing military might. Australia is a long-standing US ally.

Defence Minister Stephen Smith is due to meet US Defense Secretary Leon Panetta and Secretary of State Hillary Clinton in Perth this week for annual security talks, and one of Clinton's top advisors in the region, Kurt Campbell, earlier said the "important" spending issue would be raised.

But Smith said Sunday that the defence cuts were not on the agenda of the AUSMIN summit and it was "frankly a nonsense" to suggest that US officials were coming to Australia "to talk about our defence cuts".

"We're going to deal with the suite of strategic issues that are of importance to us," he told ABC Television.

Smith said Panetta had both publicly and privately described Australia's contribution to global security as "first-class".

The remarks were backed by the US ambassador to Australia Jeff Bleich, who said the two nations trusted one another and Washington was not concerned by the spending cuts.

"We understand that there are going to be these adjustments in budgets year on year, but in terms of the commitments we hear the same thing from Australia that we've always heard -- they will meet their commitment to us as allies," Bleich told Sky News.

"I know Kurt Campbell well, I know that he doesn't have worries about the budget,' he added. "I think the statements he made... may have been misinterpreted."

China to ramp up development on disputed island
Beijing (AFP) Nov 11, 2012 - China is to ramp up development on a disputed South China Sea island, a local government chief has said, in a move likely to stoke a growing territorial row with its neighbours.

The development of roads, water supply and drainage systems will be stepped-up in the new "capital" city of Sansha on Yongxing, one of the islands that make up the disputed Paracel chain, Luo Baoming, Communist Party secretary of southern Hainan Province told state television on Saturday.

Luo also said steps will also be taken to enforce China's "legal rights" in the region, which includes other island chains which are the subject of competing claims by Asian countries.

Beijing enraged Vietnam and caused concern in Washington when it announced the establishment of a new city and military garrison at Sansha in July.

The island, under the control of Hainan Province, will have administrative control over a region that encompasses not only the Paracels, but Macclesfield Bank, a largely sunken atoll to the east, and the Spratly Islands to the south.

The sovereignty of each remains a matter of dispute.

"To safeguard our legal rights in the South China Sea, we are now coordinating between the relevant departments in order to set a more unified, and efficient law enforcing body," Luo said.

Domestic media reported in August that work had begun on sewage disposal and waste collection facilities for the island's roughly 1,000 residents.

Beijing claims most of the South China Sea, which is home to vital shipping lanes and substantial proven and estimated oil and gas deposits.

Taiwan and ASEAN members the Philippines, Vietnam, Brunei and Malaysia all have rival claims on areas of the sea, while the United States is also watching China's increased assertiveness closely.

The announcement in July that Sansha would be established led to a formal protest being lodged by Vietnam, which said it violates international law.

The Philippines, which is involved in a dispute over the Spratly Islands, summoned the Chinese ambassador to lodge a complaint against the garrison announcement.