I believe the current rate of naval ship building is just about right. Building ships to replace current numbers in service is no longer suits the geopolitical situations in seas around China.
And extra numbers of ships are required as escorts of China's future airraft carrier groups, at least 3 of which is expected and this is excluding Liaoning which wil continue to be deployed as training and experimental ship.
The hostile gangs from east ocean and west ocean will increase in force, instigated by the desire to forestall China's military and economic progress and the fear of China's rise as a world leader.
Even if China builds 60 modern destroyers and frigates, she still lacks in number against sum of 60% of US Navy pivoted to West Pacific + Japan + Taiwan and South Korea. And with the increasing warm India - US military relations, ships from India might increase their presence in South and East China seas. Then we have the Asutralians and Vietnam.
So, I think China should increase her naval ships at least to match the sum of expected naval forces from above countries deploy to China's door steps in future.
That shouldn't be a problem if China starts spending as it should - between 3 and 4 percent of the GDP on defense. China is spending too little. All those countries you mentioned - except Japan, which has massive economic and demographic problems - spend more than China on defense regarding percentages of their countries GDP.
Second of all, China should cut the number of troops even more so. I don't see the point in having more than 800.000 or 900.000 groups, which should be highly skilled with latest weapons. The resources spent less on ground troops, means more cash for missiles, navy, air force, strategic forces, cyber warfare, etc, etc.
One must remember that the reason Japan can have still, but ageing air force and navy (except subs, which are very modern) it is because Japan barely have any ground troops at all.
The same goes for other "island" countries. China doesn't have any threat on the ground, so if China can restructure the ground troops and spend even more on navy and the air force, that can be done even with the existing budget.
Japan and Australia on the other hand, are very squized and don't have that kind of economic luxury to squeeze out some older ground troops, since they barely have any ground troops at all.
Second of all, I don't consider Australia or South Korea to be enemies and there is nothing that indicates that. Australia is was "down below" geographically, and if Australia gets too big ambitions, that will most probably irritate Indonesia a lot.
Regarding India and Vietnam - these two should also think a bit of countries that are very good friends and allies of China, such as Pakistan, Sri Lanka, Bangladesh, Myanmar, Cambodia, Laos PR, Thailand and others, while at the same time, issues with India are not that huge and there are good possibilites to solve the issues between these two.
Also, do not forget. While Saudi-Arabia is pre-occupied or obsessed with Iran, I don't think that a Wahhabi-Islamic regime is going to look very favorably on a Hindu-nationalistic regime trying to dominate anything around the Gulf area. Saudi-Arabia har started to get their own naval ambitions and you can bet they definitely crash with India's in the Gulf-area.
But, I do agree with you - just in case, China should build up it's forces even more so, and I think we are seeing just the beginning of it now. So I do agree with you in general.
Anyway, one must not forget that China is going to sell 11 SSK submarines to Pakistan and Thailand (8+3) so that's a huge thing. I don't think there are any other countries that are producing SSK submarines that has total of 11 SSK on order from other countries.
Pakistan:
http://www.defensenews.com/story/de...na-finalize-8-sub-construction-plan/73634218/
Thailand:
http://english.chinamil.com.cn/news-channels/china-military-news/2016-07/05/content_7134524.htm