China’s defence budget will increase in 2012 by 11.2% amidst an intensifying strategic rivalry between the US and China that has led to concerns from the Pentagon about the confidentiality surrounding the Chinese defence budget.

Chinese National People’s Congress (NPC) spokesman Li Zhaoxing said the planned increase would lift spending to CNY670bn ($106.4bn) in 2012, which is almost CNY67bn more compared to 2011.

The defence budget for 2011 was $91.5bn, a 12.7% increase over the 2010 budget.

Zhaoxing, however, described the budget as only 1.28 % of Gross Domestic Product (GDP), which is "relatively low" when compared with other countries, including the US, and stressed that it is aimed at "safeguarding sovereignty, national security and territorial integrity."

"China has 1.3 billion people, a large territory and long coastline, but our defence spending is relatively low compared with other major countries," Zhaoxing added.

China’s official defence spending is the second largest in the world after the US, but actual spending, according to foreign defence experts, may be 50% higher as the nation excludes outlays for its nuclear missiles and other programmes.

The nation has been reporting double-digit increases in military spending for each year since 1989.

With more than two million personnel the nation’s armed forces, also known as The People’s Liberation Army (Pla), is the biggest military in the world.

The proposed budget is expected to be approved by the parliament this week, with some analysts projecting that the Chinese military spending will surpass that of all 12 of its Asia-Pacific neighbours by 2015.