The Chinese defense budget for 2010 is to be around $78 billion, said Li Zhaoxing, spokesman for the National People's Congress, an annual two-week congregation of its 3,000 members.
The result is an increase in spending about half the usual military budget increase and is the first time in 20 years that the rise in spending will be less than 10 percent. But the amount of spending would account for 6.4 percent of China's total fiscal expenditure in 2010, the same as last year.
Most of this year's 7.5 percent increase will go toward supporting the organizational reform of the military and raise the living standards of service members. China has, in the past two decades, focused on buying more China-made high-tech weapons and reduced the number of military personnel in favor of a smaller but better trained armed forces.
Li, a former foreign minister, said the budget increase will help "improve its capability to deal with varied threats and complete diversified tasks," but he did not spell out what the threats were or from which countries and organizations they might come.
He also said that China has always taken the road to peaceful development and that considering its vast territory and coastline, the defense budget remains comparatively low. It accounts for around 1.4 percent of gross domestic product against around 4 percent for the United States and more than 2 percent for the United Kingdom, France and Russia.
China is also continuing to be more transparent in its military spending by submitting defense budgets to the National People's Congress for approval, as it will do during this session, and by issuing white papers every two years.
The same message was conveyed by Zhao Qizheng, spokesman of the National Committee of the Chinese People's Political Consultative Conference, the country's top political advisory body, which meets at the same time as the NPC. China's military development is solely for maintaining national sovereignty and territorial integrity, Zhao said at a news conference.
Despite Li's reassuring statements about transparency, some observers and analysts are suspicious of just how transparent any published data are, a report by the BBC said. Some are wondering if China is developing its first aircraft carrier, a major concern for its Pacific region neighbors, including India.
There is also confusion, say observers, as to why the government would announce a cutback in a budget increase at a time of tensions, including military ones, with the United States, a BBC reporter said.
There was a lot of hand wringing in Beijing when Washington announced this year that its $6.4 billion arms sale to Taiwan will go ahead.
Taiwan was called Formosa before the remnants of China's nationalist army fled there ahead of advancing victorious Communist forces in 1949. A major plank of Chinese foreign policy for decades has been its claim of sovereignty over the self-governing island of Taiwan.
China's position on suspending its military visits with the United States "remains unchanged" due to the arms sale, a Chinese military spokesman told the national government news agency Xinhua at the end of February.
"The United States should bear full responsibility for the current difficult situation on China-U.S. military exchanges," said Defense Ministry spokesman Huang Xueping. The sale violates a 1982 Sino-U.S. joint communique that said the United States would not seek to carry out a long-term policy of arms sales to Taiwan and would gradually reduce arms sales.
Exchanges on hold include a visit by U.S. Defense Secretary Robert Gates and mutual visits of warships.
The U.S. arms sale to Taiwan "seriously endangers China's national security, damages China's core interests, greatly disturbs the relations between the two countries and the two militaries and tremendously harms the overall China-U.S. cooperation and stability across the Taiwan Strait."
But Beijing has also reassured its neighbors Japan that any Chinese military buildup is not offensive in nature. The defense ministry said last month that Japan's concern and exaggeration of China's military power hurts bilateral ties, a report by Xinhua said.
Huang made the remarks after reports said Japanese leaders may revise defense policies to strengthen the Japan-U.S. alliance and confront China's increased military strength.
China recognizes the Japan-U.S. military alliance as an "outcome of history," Huang said. "We hope the Japanese side will do more to promote the sound development of China-Japan relations. Japan's defense measures should be conducive to regional peace and stability."