China and Indonesia have questioned the wisdom of Australia hosting US Marines in the Northern Territory, with claims the move risks creating a "circle of tension and mistrust".

Up to 2,500 US Marines will be stationed in Darwin by 2017 under a new agreement announced by Prime Minister Julia Gillard and US president Barack Obama in Canberra yesterday.

Initially the deal will see just 250 US Marines based in Darwin on six-month rotations, but the overall numbers will be built up over time.

The announcement is widely seen as an attempt to balance the rising influence of China in the region.

The Chinese government had already been briefed by Australia so the announcement came as no great surprise.

But officials in Beijing were quick to question whether it was appropriate to have US soldiers stationed on Australian soil.

Foreign ministry spokesman Liu Weimin said China would never enter such military alliances.

"We believe that there should be real actions to further strengthen cooperation with the two sides," he said.

"As for using the form of a military alliance, China has its own concepts of friendly cooperation with all countries."

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 3 minutes 42 seconds 3 m 42 s China says US deal creates friction Download 1.7 MB

He also said that his country was actively promoting peaceful international development and called on other nations to adopt the same attitude.

Mr Liu said the global economy was in a rocky state and questioned whether now was a smart time for Australia to make the new agreement with the United States.

"It may not be appropriate to strengthen and extend this military alliance," he said.

"Whether it suits the common interests of countries around the region and the whole international community remains under question."

Mr Liu said he hoped the United States will match its actions with its words in terms of promises that it is not trying to rein in China.

'Play by the rules'

When questioned about China's future in the Asia-Pacific, Mr Obama said he "welcomed a rising, peaceful China" but warned it must "play by the rules of the road".

"What they've [China] been able to achieve in terms of lifting hundreds of millions of people out of poverty has been nothing short of remarkable," he said.

"The main message that I've said not only publicly but also privately to China is that with their rise comes increased responsibility."

Mr Obama also said he would welcome consultations with China.

"The notion that we fear China is mistaken. The notion that we are looking to exclude China is mistaken," he said.

Indonesia has also expressed concern about the decision to station US Marines in Australia.

Foreign minister Marty Natalegawa warned it could provoke a negative reaction.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 3 minutes 33 seconds 3 m 33 s Indonesia warns of tension over Marines deal Download 1.6 MB

"What I would hate to see is if such developments were to provoke a reaction and counter-reaction precisely to create that vicious circle of tensions and mistrust or distrust," he said.

"That's why it's very important when a decision of this type is taken there is transparency of what the scenario being envisaged is and there is no misunderstanding as a result."

Mr Natalegawa said he was informally told of the deal by Foreign Affairs Minister Kevin Rudd a few days ago.

'Additional friction'

Professor Jia Qingguo from the School of International Studies at Peking University says the deal does not make sense.

"Personally, I think it's not very smart for the Australian government to do this because it doesn't contribute to Australia's security and it creates additional friction between Australia and China," he told AM.

"I don't know how much Australia can gain from this."

He added that it would "definitely" hurt relations between Australia and China.

"I think the Chinese government is concerned about the intentions rather than about the actual capabilities," he added.

"I think it's like (the) US is saying to Australia, you are supposed to be on my side. And Australia has agreed to it.

"I don't think there'll be immediate massive response of any sort. But I think this will definitely add concerns to existing concerns about the US effort to contain China."