Dalai Lama
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Well, I was wrong. Japan is less than China.
Well, you can see the pattern here. India's spending increases in tandem with China's ie. in response to China's who has a much bigger economy, hence a bigger military budget. The US's spending is slightly erratic and obviously depends on their commitments, Iraq-Afghanistan etc. Japan, with it's pacified doctrine maintains a consistent 1%. Interesting point to note is that India, China & Japan's defence budgets are on the rise while Pakistan's which has always been significantly higher than all other's is on the decline along with their economy.
In conclusion, I don't think you can blame anyone for starting an arms race (at least not yet). From what I can see, the military budgets of all our nations (except maybe Pakistan and the US) seem consistent with their economical state.