The share of China's annual defense expenditure in its GDP has remained relatively steady, while that in overall state financial expenditure has been moderately decreasing, said a white paper on the country's national defense issued on Thursday.

With the development of national economy and society, the increase of China's defense expenditure has been kept at a reasonable and appropriate level, says the white paper issued by the Information Office of the State Council.

According to the report, China's GDP was about 31.4 trillion yuan (4.79 trillion U.S. dollars) in 2008 and about 34.1 trillion yuan in 2009. State financial expenditure was about 6.26 trillion yuan in 2008 and 7.63 trillion yuan in 2009, up 25.7 percent and 21.9 percent respectively over the previous year.

China's defense expenditure was 417.876 billion yuan in 2008 and 495.11 billion yuan in 2009, an year-on-year increase of 17.5 percent and 18.5 percent respectively.

China adheres to the principle of coordinated development of national defense and economy, appropriately determines the size of defense expenditure in line with the demands of national defense and economic development, and manages and uses its defense funds in accordance with the law, the report says.

In the past two years, the increase in China's defense expenditure has primarily been used to improve living and working conditions for the troops, accomplish diversified military tasks, and push forward the Revolution in Military Affairs with Chinese characteristics, the report says.

The People's Liberation Army (PLA) has adjusted servicemen's salaries and allowances, increased funding for education and training, and improved conditions of border and coastal defense forces and units in remote areas and harsh environments.

It has increased investment in improving MOOTW capabilities, in disaster relief operations, and in escort operations in the Gulf of Aden and waters off Somalia.

In view of rising prices and maintenance costs, it has moderately increased the funds for high-tech weaponry and equipment and their supporting facilities, according to the report.

China's defense expenditure mainly comprises expenses for personnel, training and maintenance, and equipment, with each accounting for roughly one third of the total, the report says.