China's defence budget in 2010 went up by just 7.5 percent in 2010.
Li Zhaoxing, China's parliamentary spokesman said that the defence budget for 2011 would be 601.1 billion yuan ($91.5 billion), a significant rise from 532.1 billion yuan in 2010. Playing down the budget hike, he said, "China's defence spending is relatively low by world standards...China has always paid attention to restraining defence spending."
The south-east Asian nation is growing at a rapid pace and has in 2010 and 2011 engaged in sharp rhetoric with Japan and the USA while also trying to assert its authority in the region.
Analysts predict that the move is part of a deliberate campaign by the Chinese authority to intimidate its allies notably, India and Taiwan, two nations with which the country has long standing territorial disputes. While India has already earmarked an increased spending to boost its armed forces, Taiwan a small island nation is looking up to its western allies for military assistance.
Analysts in China say that much shouldn't be read between the lines as the hike is part of a growing economy's effort to maintain pay-cheques to its senior army officials. They say that heavy inflation is why the government has hiked the budget, so that it can increase the salaries of its army official.
China has a 2.3 million strong army, which is better known as the People's Liberation Army.