Beijing, March 4
China today announced it would hike its defence budget by 11.2 per cent to a whopping $106.4 billion, pushing its military spending for the first time to the triple digit, a move that may fuel concerns among neighbours and others about its growing might in Asia Pacific.

The increase announced by parliament spokesman Li Zhaoxing will bring official outlays on the People's Liberation Army to 670.3 billion yuan ($110 billion) for 2012, after a 12.7 per cent increase last year and a near-unbroken string of double-digit rises across two decades.

Li said the world has nothing to fear, and the money spent on the PLA paled in comparison with the Pentagon’s outlays.

"You can see that we have 1.3 billion people with a large land areas and a long coastline, but our outlays on defence are quite low compared to other major countries," Li told a news conference before the annual full session of the National People's Congress, the Communist Party-controlled legislature that will approve the budget.

Asian neighbours, however, have been nervous about Beijing's expanding military, and this latest double-digit rise could reinforce disquiet in Japan, India, Southeast Asia and self-ruled Taiwan, which China considers part of its territory.

"Eleven per cent, for a Chinese defence budget, is what I would characterise as a reasonably sizeable increase," said C. Uday Bhaskar, a former director of India's Institute for Defence Studies and Analyses in New Delhi. "It also, I would say, goes beyond the normal pegging we do for inflation, and it would be noted with great interest and concern by China's principal interlocutors," he said.

According to the officials figures, China had spent about $ 92 billion on defence last year, which represented a 12.7 per cent increase over the 2010 budget of $ 77 billion. This year's increase would represent a hike of $ 14.4 billion.

Besides, the specified military spending, which many western analysts say is far higher than the official version, China last year spent over $100 billion on internal security. Analysts say the hike in China's defence budget, which is now almost triple of the Indian defence spending, may impact New Delhi's military expenditure.

India had allocated $ 36.04 billion for defence last year, which represented an 11.59 per cent growth over the 2010 budget.

Obama has sought to reassure Asian allies that the United States will stay a key player in the area, and the Pentagon has said it will "rebalance toward the Asia-Pacific region".

Obama's proposed budget for the fiscal year of 2013 calls for a Pentagon base budget of $525.4 billion, about $5.1 billion less than approved for 2012.

Beijing has sought to balance long-standing wariness about US intentions with steady relations with Washington, especially as both governments focus on domestic politics this year, when Obama faces a re-election fight and China's ruling Communist Party undergoes a leadership handover.

But the US "pivot" has fanned unease in China, with some PLA officers calling it an effort to fence in their country and frustrate Beijing's territorial claims.

China has advertised its long-term military ambitions with shows of new hardware, including its first test flight of a stealth fighter jet in early 2011 and its launch of a fledgling aircraft carrier in August — both trials of technologies that remain years from deployment.

Beijing is also building new submarines, surface ships and anti-ship ballistic missiles as part of its naval modernisation.

China's military build-up is likely to continue "unabated", irrespective of recent US moves in Asia, the U.S. military commander for the Asia-Pacific region, Admiral Robert Willard, said on Tuesday.

Japan and China have locked horns over islands each claims in the East China Sea; Vietnam, the Philippines and other nations have challenged Beijing over claims to swathes of the South China Sea that could be rich in oil and gas.

A spokesman for Philippines' Department of National Defence, Peter Paul Galvez, said the latest increase in PLA spending was not cause for alarm. Others were more anxious.

"China shares its land border with 14 countries; it used to make sense that a country in such a position maintains strong conventional forces," said Kazuya Sakamoto, a professor at Osaka University in Japan who researches international security. “But in this nuclear age, it does not really make sense that China, a nuclear-armed country, continues to build up its military at such a pace,” said Sakamoto. — Agencies