The increase comes as Beijing's armed forces undergo rapid modernisation and eye deepening strategic competition with the United States.

China has the world's second-largest military budget, but lags well behind the United States, its primary strategic rival.

Beijing will spend 1.78 trillion yuan ($245.7 billion) on defence this year -- still less than a third of Washington's budget, according to a government report.

China's military budget has increased for decades in line with its economic development.