Article Posted on : - Mar 04, 2011

A file photo.

BEIJING (PTI): China Friday announced that it will hike its defence spending by 12.7 per cent, raising it to a staggering 601 billion yuan (USD 91.5 billion), signalling the country's return to double-digit military growth after a short lull.

The increase in the draft defence budget focuses towards military hardware upgrade and modernisation, military training, human resource development and improving the living standards of the Red army, said Li Zhaoxing, spokesman for the annual session of China's national legislature.

The hike in military spending comes a day ahead of the opening of the National People's Congress which is to chalk out the country's new social and economic goals.

The raise also comes at a time when the Chinese military has embarked on development of new weapons system like carrier killer and space missiles, aircraft carrier and new range of nuclear submarines.

China spent about USD 77 billion last year as defence expenditure, which was an increase of 7.5 per cent compared to 2009's budget.

Defending the 12.7 per cent increase this year, Li, the former Chinese Foreign Minister said, the ratio of China's military spending in its total gross domestic product (GDP) is lower than many countries, including India.

When asked about concerns in India and other neighbouring countries over steady increase of China's defence budget, Li said while China's military spending amounted to about 1.4 per cent of its GDP, "that ratio in India is much higher than two per cent as far as I know."

He said China is willing to maintain friendly relations with neighbouring countries such as India in spite of the increase of its defence spending.

China and India have reached a consensus on maintaining peace and tranquility of their border areas before border issues are eventually settled, Li said.

China is ready to work with India to implement relevant agreements to maintain a stable situation in border areas, which is conducive to the interests of the two countries, he said.

"It is true that China's defence budget is raised a bit, but the ratio of the defence spending in the country's GDP remains very low, much lower than those of many other countries," he said.

"The government has always tried to limit military spending and it has set the defence spending at a reasonable level to ensure the balance between national defence and economic development," Li said.

The former foreign minister said China's defence expenditure is transparent and defensive in nature.

"There is no such thing as the so-called hidden military expenditure in China, and the budget is subject to auditing from the government and military," he said.

"China is committed to peaceful development and a national defence policy that is defensive in nature," Li said.

Li said, compared to the world's average, China's military spending is low given its 1.3 billion population and vast land and long coastal lines.

"The limited military strength of China is solely for safeguarding its national sovereignty and territorial integrity and would not pose a threat to any country," Li told state run Xinhua news agency.

Commenting on China's defence allocation, Major General Luo Yuan, a researcher with the Chinese People's Liberation Army (PLA) Military Science Academy said China's military spending is dwarfed by that of the United States which, at 725 billion US dollars, accounted for about 4 per cent of the country's GDP for the 2011 fiscal year.