China has announced it will increase its defence budget by 17.6 percent to US$58.76bn for 2008.
China's National People's Congress spokesman Jiang Enzhu says the money will be used to increase personnel wages, improve training and upgrade military equipment.
"China pursues a national defence policy which is defensive in nature," Enzhu says.
"China's limited military capability is solely for the purpose of safeguarding independence, sovereignty and territorial integrity, and will not pose a threat to any country."
He says China's defence spending accounts for 1.4 percent of its GDP – less than that of Britain, the US or India.
Earlier this week the US produced a report on China's military capabilities, stating the country is developing weapons that will disable its enemies' space technology in a conflict.
Chief Cabinet Secretary Nobutaka Machimura says China's double-digit increase for the 20th consecutive year is "beyond comprehension" of neighbouring countries and criticised the nation's lack of transparency in defence spending.
"A country which will hold the Olympics and is trying to attain (economic) development peacefully in the world should make efforts on its own to clarify that area," he says.
By Elizabeth Clifford-Marsh