A draft budget report, which is expected to be approved during the week-long annual session of the National People's Congress (NPC) or Parliament, which opened here on Wednesday morning, proposed a 12.2 per cent hike in defence spending to 808.2 billion Yuan, or $132 billion.

China on Wednesday announced its biggest hike in military spending in three years, with its defence budget set to cross $ 130 billion in the coming year.

Chinese military analysts explained the 12.2 per cent hike as driven by the need to counter a "high risk security environment" in the region, marked in recent months by rising territorial tensions with many neighbours.

A draft budget report, which is expected to be approved during the week-long annual session of the National People's Congress (NPC) or Parliament, which opened here on Wednesday morning, proposed a 12.2 per cent hike in defence spending to 808.2 billion Yuan, or $132 billion.

This reflected an $ 18 billion rise from the previous year, when the budget rose by 10.7 per cent, and the highest percentage increase since 2011, when spending was hiked by 12.7 per cent.

While Chinese officials said the increase was in keeping with the size of China's growing economy and in line with what most countries spend in terms of percentage of GDP, the 12.2 per cent hike is certain to stir the attention of the region, and particularly China's neighbours.

China's spending now dwarfs that of most countries in the region, and is second only to the United States, which spends more than $ 600 billion on defence.

Last month, India announced a 10 per cent hike in military spending during the interim budget. On account of the weakening rupee, however, India's effective defence spending in dollar terms actually fell from last year, down to $ 36.2 billion from $ 37.5 billion.

"There is a yawning gap emerging in the conventional capabilities between China and India," warned Brig. (Retd) Arun Sahgal, Director of the Forum for Strategic Initiative in New Delhi.

"This asymmetry is increasing by the day, and the fundamental point is that the Chinese, because of a strong economic position and a very definite plan, are focused on military modernisation".

Chinese Premier Li Keqiang, who presented the government's annual report to the NPC's opening session, vowed to carry out "coordinated planning for military preparedness in all scenarios" and to push the development of "new and high technology weapons and equipment". He said China would also enhance border, coastal and air defences and "place war preparations on a regular footing".

At the same time, his work report said China would "advance neighbourhood diplomacy" and "speed up" infrastructure links with neighbours. Mr. Li specifically highlighted the on-going plans to build a Bangladesh-China-India-Myanmar (BCIM) economic corridor, a "maritime silk road" linking Asia and the Indian and Pacific Oceans, and a corridor linking China and Pakistan as priorities.

Chinese military analysts explained the defence hike as a response to China's challenges in the region, such as on-going territorial differences with Japan over East China Sea islands, and recent disputes in the South China Sea.

"In order to protect the country and safeguard regional peace and stability, China has to enhance its national defence," said Chen Zhou, a researcher with the People's Liberation Army's Academy of Military Sciences and a member of the NPC, adding that China was facing "increasing strategic pressure" with some countries in Asia "speeding up strategic adjustments and strengthening military alliances", in a reference to the U.S. "pivot".

"The comparatively low level of input into national defence, coupled with a high-risk security environment, dictates that we must raise our defence budget on a moderate scale," he told the official Xinhua news agency.

Asked about fears voiced by some countries in the region, such as Japan, about China's military spending, Qin Gang, the Foreign Ministry spokesperson, said the PLA was not made up of "boy scouts with spears".

"Some foreigners always expect China to be a boy scout. In that way, how can we safeguard national security and world peace? Even as a scout grows up, his former dress and shoes will not fit anymore and thus he will have to change into bigger ones," he said.

The spending hike will, nevertheless, likely raise concerns, analysts say, as the gulf in military capabilities continues to widen even as territorial disputes remain unresolved.

Brig. (Retd) Sahgal said with the increased spending, China's "coercion index" vis-à-vis countries like India had increased.

"In India, unfortunately, the last decade has been a lost decade," he said. "The Chinese are now increasing their budget by the total Indian defence budget. In the past four years, there hasn't been a single purchase, or modernisation of the three services, while our equipment is getting depleted. What we are seeing," he added, "is that we are now getting out of their league".

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