The London-based International Institute for Strategic Studies (IISS) said in its report "The Military Balance 2006" that the trajectory for China's military-related spending was "unambiguous".

"Expenditure is on a sharp upward trend and will remain so in view of popular and elite support for accelerated defence modernisation and because of China's increasing capacity to sustain spending at a high level without noticeably undermining other, developmental goals," it added.

The global think-tank said it put Chinese military-related spending at 39.6 billion dollars (31 billion euros) based on the last official Chinese defence budget official breakdown in 2003.

But assessed on an alternative calculation of estimated real spending per head of the population, that figure nearly doubled to 75.5 billion dollars a year, it added.

The IISS noted that US defence strategists themselves had identified China as "a power at a 'strategic cross-roads' that is still pointing largely in the wrong direction and which has the greatest potential to emerge as a military rival to the US".

"The military dynamic of the US-China relationship therefore remains implicitly but decidely competitive," it added.

"With that, the risk will grow that this military dynamic will over time have a greater bearing on the tone and content of the relationship as a whole."

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