The rise in spending comes with Washington voicing concern that China's military build-up could tilt the strategic balance with Taiwan and also threaten US forces in Asia.

In his budget report to the upcoming annual session of the National People's Congress, Finance Minister Jin Renqing is expected to propose raising military spending in 2005 to 244.65 billion yuan (29.5 billion dollars), sources said.

China's stated military budget has increased by double digits over most of the last 15 years with defense spending rising by more than 17 percent in 2001 and 2002.

It fell to a 9.6 percent clip in 2003 before rising again to 11.6 percent last year.

According to the US Central Intelligence Agency, China's publicized military budget is "less than half of China's actual defense spending."

Other military analysts say China's actual defense spending could be up to three times more than its stated figure as Beijing does not include new arms purchases and weapons' research and development in the figures.

By comparison, the US defense budget is about 400 billion dollars this year, while Japan's is about 47 billion dollars.

The rise in spending comes as the European Union considers the lifting of an arms embargo on China put in place following the 1989 military crackdown on the Tiananmen democracy protests in central Beijing.

The US has been adamantly opposed to the ban being lifted.

In a white paper on defense published in December, China said its ongoing military modernization was aimed at squashing "Taiwan independence forces" and made clear any attempt at independence would be harshly dealt with.

"Should the Taiwan authorities go so far as to make a reckless attempt that constitutes a major incident of Taiwan independence, the Chinese people and armed forces will resolutely and thoroughly crush it at any cost," the policy paper said.

The document said it was the "sacred responsibility" of the Chinese armed forces to stop Taiwan independence forces from splitting the country.

China already has 600 missiles pointed at the island, from which it split in 1949 at the end of a civil war.

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