In the recent times, SIPRI posted a new report regarding the military sales in the five year period from 2005-2009. There are some reports on it regarding to China's affect on the military sales in this period.
I think this article from WPR pretty much summarized what all the other articles have been saying.
It is quite clear that a lot of the Southeastern Asian nations are building up their forces during the past 5 years. That is confirmed by the report. However, I can't really definitively say that all of the countries are aiming at China. In the case of Vietnam, it's quite obvious that the recent purchases for the Kilo submarines and Su-30 fighter jets were aimed at China. I have talked about those purchases before and have labeled them as basically a waste of money. In the case of Indonesia, their purchases have pretty much been to just replace American weapons after America stopped supplying parts for those weapon systems. In fact, one could argue that those purchases were made in response to Australia and Singapore rather than China. It also explains why China has no qualms about selling weapons to Indonesia. In the case of Malaysia and Singapore, I think their purchases are aimed at each other as well as China. In many cases, one would ask why Malaysia needs to spend so much money on its defense. One could say that they are fearful of Chinese rise, but one could also say that they are just fearful of the more modern arsenal of Singapore. In both countries' cases, the rise in military import is also a cyclical issue. For example, Singapore only needs to buy fighter jets every x number of years. It just happens that it made a major purchase for F-15SGs during this 5 year period.
It did surprise me that China remained the largest importer of weapons during this period, because it seemed to have been so long since they actually bought anything meaningful. The report also acknowledged that China have only been buying some helicopters and engines for different platforms since 2007. Although, they did receive some S-300PMU2 from the Russians in 2008. Looking back, a large part of their purchases made in the wake of Bush's approval for Taiwan military sales were delivered in 2005 and 2006. I would expect the figures to drop quite a bit in the next 5 years, which would cause China to loose the title of the world's top importer of weapons. That would certainly be a good thing. However, they still do have quite a few items that would be considered foreign purchases like the Zubr deal, Ka-28/Mi-171 purchases, possibly another batch of AL-31FN for J-10, more RD-93s for JF-17s, D-30KP2 for H-6Ks, diesel engines for 054 series, engines for Z-8/Z-9/Z-10/Z-15. They could also potentially buy S-400 and Il-76/78s from the Russians, but we will have to wait and see.
I also read an article where the Russians complained that China is not buying more weapons from them. The truth is that they just need to get used to the fact that what they are selling is not all that appealing.