China was the elephant in the room on Monday when Australia’s government announced that it has tapped US defense contractor Raytheon to provide a US$1.5 billion surface-to-air missile system.

“A modern and integrated ground-based air defense system is needed to protect our deployed forces from increasingly sophisticated air threats, both globally and within our region,” Australian Defense Minister Marise Payne said in a statement. Raytheon was the sole bidder for the contract.

Australia plans to boost defense spending by US$21.6 billion over the next 10 years at a time when Chinese economic and military might is expanding throughout the region. Analysts say US defense contractors will benefit from such spending.