Defence Secretary Ben Wallace has denied that Britain is seeking a new "cold war" with China following the announcement of the Aukus partnership between Australia, the US and the UK.
Aukus will see the partners work together to supply Australia with nuclear-powered submarines, a defence pact the nations forged to check Beijing's growing power in the Indo-Pacific.
The move drew an angry response from Beijing, with the Chinese embassy in Washington warning countries against building "exclusionary blocs targeting or harming the interests of third parties".
A Chinese embassy spokesman Liu Pengyu said: "In particular, they should shake off their cold war mentality and ideological prejudice."
Defence Secretary Ben Wallace insisted the Chinese were "wrong" to see the trilateral agreement as an act of aggression.
He told BBC's Radio 4 Today Programme: "In the Cold War, everyone was stuck behind fences and didn't really communicate with each other and certainly didn't engage in global trade, and I think it's probably a Cold War view to describe it as a cold war."
At the same time, he acknowledged that China's military expansion – and its involvement in a series of disputes with neighbouring nations over navigation rights in the South China Sea – inevitably led to a "reaction" elsewhere.
"China has launched on a huge investment in its military and its surface fleet and aircraft. It is probably one of the largest armed forces on the planet," Mr Wallace said.
"But it is not just about China. It is about the modern capabilities a country such as Australia needs."
The pact was announced in a joint statement on Wednesday by Boris Johnson, US president Joe Biden and Australian prime minister Scott Morrison.
Mr Johnson said they would work "hand-in-glove to preserve security and stability in the Indo-Pacific".
At the same time, he said Scotland and parts of the north of England and the Midlands would benefit from work on the Australian submarine fleet.
The move to nuclear-powered – although not nuclear-armed – vessels will give the Australian navy the ability to operate undetected for longer periods underwater.
It is however a notable blow to France which had a contract with Canberra to supply a new fleet of conventional diesel-electric submarines which has now been scrapped.
In a joint statement, foreign minister Jean-Yves Le Drian and armed forces minister Florence Parly condemned the move as contrary to "the letter and spirit of the co-operation" between France and Australia.
They added: "The American decision, which leads to the exclusion of a European ally and partner like France from a crucial partnership with Australia at a time when we are facing unprecedented challenges in the Indo-Pacific region, be it over our values or respect for a multilateralism based on the rule of law, signals a lack of consistency which France can only notice and regret."
Defence Secretary Ben Wallace said he understands French frustration at losing out on its submarine contract with Australia.
He told BBC Breakfast he spoke to his French counterpart Florence Parly on Wednesday night.
Watch: NATO not seeking 'new cold war' with China.
Mr Wallace said: "I understand France's disappointment. They had a contract with the Australians for diesel electrics from 2016 and the Australians have taken this decision that they want to make a change.
"We didn't go fishing for that, but as a close ally, when the Australians approached us, of course, we would consider it. I understand France’s frustration about it."
The initial scoping phase for the submarines is expected to take 18 months, with UK officials predicting the programme will "create hundreds of highly skilled scientific and engineering roles" across the country, as well as driving investment in high-tech sectors.
The UK's Carrier Strike Group 21 – led by HMS Queen Elizabeth with US support – is currently being deployed in the region as a sign of the new priority it is being given.