Military spending in 2008 will reach 417.8 billion yuan (57.2 billion dollars at the end-2007 exchange rate), a spokesman for China's parliament told reporters ahead of the legislature's annual session beginning Wednesday.

As Jiang Enzhu announced the figures, he also renewed a warning to rival Taiwan that its plans for a March 22 referendum on United Nations membership was putting an already uneasy peace between the two sides at risk.

Nevertheless, Jiang said the budget rise, following a similar jump in 2007, was not excessive, with the spending coming off a low base and helping to boost soldiers' incomes as well as beef up the military's high-tech capabilities.

"In recent years the Chinese government has moderately increased its spending on national defence on the basis of sustained, steady and fast economic growth and rapid build-up of government revenues," Jiang said.

Jiang said China's military spending was just 1.4 percent of its gross domestic product last year, compared with 4.6 percent in the United States and three percent in Britain.

The release of the budget figures came after the Pentagon published a report that expressed concern about China's growing military might and said a lack of transparency from Beijing posed risks to regional and international stability.

The Pentagon said China's military spending in 2007 was between 97 and 139 billion dollars, well in excess of Beijing's official budgeted figure of 45 billion dollars.

The Pentagon further raised concerns over China's development of cruise and ballistic missiles, its testing of an anti-satellite weapon last year and an apparent rise in cyber-espionage emanating from the Asian nation.

"China's expanding and improving military capabilities are changing East Asian military balances; improvements in China's strategic capabilities have implications beyond the Asia-Pacific region," the report said.

China's foreign ministry reacted angrily to the Pentagon's claims, saying it was a "serious distortion of facts".

"China is resolutely against this and has made solemn representations to the United States... this will do no good to our bilateral relations," ministry spokesman Qin Gang told reporters.

"We urge the United States to drop its Cold War mentality."

Japan also said on Tuesday that the international community remained concerned about a lack of transparency by China's military.

The Pentagon report warned that although the situation in the Taiwan Strait remained stable, the balance of military power was continuing to shift in China's favour.

In response, foreign ministry spokesman Qin bluntly told the United States to stop selling weapons to Taiwan and to end all military ties with the island.

Parliamentary spokesman Jiang, meanwhile, warned Taiwan would pay a "heavy price" if its referendum on joining the UN was endorsed by the public.

"We will make well our preparations and firmly curb the dangerous activities of Taiwan independence forces," Jiang said.

China and Taiwan split following the end of a civil war in 1949 and Beijing insists the two sides must eventually reunify, by force if necessary.

China's parliament, the National People's Congress, will formally endorse the 2008 military budget during its annual session, which will last until March 18.

Chinese Premier Wen Jiabao is scheduled to give an annual government work report to the parliament on Wednesday, during which official economic growth and inflation forecasts for the year are expected to be announced.

earlier related report
China rejects Pentagon report, tells US to end Cold War thinking
China on Tuesday told the United States to drop its Cold War mentality as it strongly rejected a Pentagon report that raised concerns about the Asian nation's rising military power.

"(The Pentagon report) is a serious distortion of facts and attempts to interfere in China's affairs," foreign ministry spokesman Qin Gang told reporters.

"China is resolutely against this and has made solemn representations to the United States... this will do no good to our bilateral relations."

Qin insisted China was not a threat to any country.

"We urge the United States to drop its Cold War mentality and have a correct understanding of China and China's development, correct its wrongdoings and contribute to mutual trust and constructive cooperation," he said.

The Pentagon on Monday expressed a range of concerns about China's growing military might, including what it called a lack of transparency that posed risks to regional and international stability.

"China's expanding and improving military capabilities are changing East Asian military balances; improvements in China's strategic capabilities have implications beyond the Asia-Pacific region," the Pentagon report said.

The Pentagon further raised concerns over Beijing's development of cruise and ballistic missiles, its testing of an anti-satellite weapon last year and an apparent rise in cyber-espionage emanating from China.

It also said China's military spending in 2007 was between 97 and 139 billion dollars, well in excess of Beijing's official budgeted figure of 45 billion dollars.

On Tuesday, China announced its defence budget for 2008 would be about 57 billion dollars, a rise of 17.6 percent from 2007 but far less than the US estimate.

Qin said the military build-up was defensive in nature, aimed purely at safeguarding the country's extensive borders, and was in keeping with the country's rapid economic development.

He also criticised what he called attempts in the United States to concoct a "China threat" and said that the Chinese government had every right to build a sound military.

"For any country to keep a justified military power is natural," he said.

Although spokesman Qin did not highlight it, China's official budget for 2008 remains about 10 times less than the nearly 600 billion dollars US President George W. Bush proposed for US defence and military spending this year.

Experts have said China's build-up appeared aimed at retaking democratically ruled Taiwan, which it views as a renegade province, and countering possible US intervention on Taiwan's behalf in the event of war.

But Qin said the United States was adding to the military tensions by selling weapons to Taiwan and he called for that to stop.

"We urge the United States to... stop selling weapons to Taiwan, cease military ties with Taiwan, stop sending erroneous messages to Taiwan secessionist forces and work with China to safeguard peace and security across the Taiwan Strait," he said.

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