The reason for Japan's military force being so small is because it's actually built into their constitution. When Japan lost WWII, there were significant fears that a disarmed Japan would be gobbled up by the Soviet Union or Communist China and become something like East Germany, (or as we now see... North Korea). So one of the goals was to keep them as a sovereign nation without a military of offensive capability. In order to keep them with teeth, the United States entered into treaties of mutual cooperation with respect to military defense.
In very simple terms: Japan has a very small military because the United States agreed to commit its military to defending Japan so that the other East Asian nations would not fear another Imperial Japan. Japan's resurgence as a strong economic force in the area would have been very frightening (and likely sabotaged) to the other nations of the area, it was their extreme focus on a very 'self defense only' military that has allowed them to interact with other nations without those other nations fearing for their own sovereignty.
China on the other hand, has a much smaller military because they had a bit of a buffer in terms of the Soviet Union (though there were always fears of a conflict there, which is probably why Mongolia still exists). However China was extremely isolationist, and was really fighting it's own civil war in terms of the cultural revolution. It didn't really have the economy to field a significant military until very recently. Remember, it wasn't even until Nixon that China really began engaging economically. It's economy is large now, but that's a recent thing, and military power like that comparable to the United States is not something that can be developed overnight. You can certainly take advantage of 'skipping' development of certain technologies, but there is a massive industrial base that must be created. The modern US military as it exists today is the product of nearly a century of focused buildup.
Another reason for China not having a massive military, is that it didn't really have massive overseas economic interests until recently. The US had shipping lanes to keep open, markets to keep stable, strategic allies to support, and until the 1990s, another superpower that it had to match militarily on a superpower scale. (Whether people agree that this is the appropriate use for a nation's military is tangential, I'm just trying to explain why the size differences exist)