China plans to increase its defense budget by 17.6 percent in 2008, a parliament spokesperson said on Tuesday.

The First Session of the Eleventh National People's Congress (NPC) held its first press conference at the Great Hall of the People in Beijing March 4, 2008. Jiang Enzhu, spokesman for the press conference, answers questins of reporters (Xinhua Photo)

The planned defense budget for 2008 is 417.769 billion yuan, a rise of 62.379 billion yuan from the actual military spending last year, Jiang Enzhu, spokesman for the annual session of the National People's Congress (NPC), told a press conference.

The budget equals 57.229 billion U.S. dollars if converted at the exchange rate by the end of last year, Jiang said.

"The ratio it takes against this year's total fiscal expenditures is slightly lower than those of previous years," he said.

Jiang explained that the defense budget is raised to further increase benefits for military personnel and offset the impact of price hikes to allow more input in oil purchase.

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More money will be spent on education and training in army, he said.

The increased budget will also be used to upgrade the military equipment "moderately" so as to enhance the troops' capability of combating a defensive war based on information technologies, he said.

Jiang called the defense budget growth a "compensatory" rise, saying it will help reinforce the originally weak basis of military defense, given the rapid and steady growth of China's economy and fiscal revenues in recent years.

From 1979 to 1989, China's defense expenditure actually registered an average annual decrease of 5.83 percent, and its growth in recent years is still far below the increase of fiscal revenues, he said.

China saw an average annual rise of 15.8 percent in military spending from 2003 to 2007, while the fiscal revenues grew 22.1 percent averagely per year during the same period.

Jiang noted that China's military spending remains a low level compared with some other countries, especially the big powers, in both ratios against their GDP (gross domestic product) and total fiscal expenditure.