Russia isn't the real threat.
China is. And NATO needs to arm up, fast.

How does China pose a conventional military threat to Europe? They're on the other side of Asia. Only in alliance with Russia could they pose a direct conventional military threat....so that reduces to (again) defending primarily against Russia. Which is why it is important to inflict a heavy loss against Putin for his foray into Ukraine.

Rather than a conventional military threat, China poses a broader global geopolitical threat through its efforts to gain political and economic advantages in strategically important areas across the globe. It does this primarily through trade, investment, diplomatic and economic arrangements. The way you would counter that is not by "arming up," but by engaging in the same sort of activities to draw other nations into the Western sphere, rather than the Chinese one. The Danes increasing their direct military expenditures, or having the UK field tanks (on an island nation with no land borders?), doesn't help check the Chinese.

Unfortunately, the U.S. is withdrawing from exactly that sort of geopolitical exercise of power, and ceding the entire field to the Chinese right now. If Europe wanted to react to the Chinese threat, they would step up into the vacuum being created by the U.S. in that "soft power" field, not through beefing up conventional military forces - which are primarily useful against countering threats from Russia, not China.