As concerns mount globally over its military build-up, China today announced that it will hike its defence spending by 12.7 per cent, raising it to a staggering 601 billion yuan ($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 such as carrier killer and space missiles, aircraft carrier and new range of nuclear submarines.

China spent about $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 Minster 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 tranquillity 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.

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

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