Kong said that a recent Pentagon report on China's military spending was "groundless and had ulterior motives".

The report released by the US Defence Department last week claimed that China's actual defence spending could be as high as some US$65 billion.

In response to a journalist's question on the report, Kong said that although China had a large population and long land border and coastline, China's national defence spending "remains at a lowlevel".

No matter whether measured by per capita, per servicemen, as a proportion of GDP or state fiscal expenditure, China's military spending was very low compared with major countries in the world, he said.

As a developing country, China considered economic progress its main task, Kong said. In a climate of economic development and improvements of people's lives, "it is appropriate that China increases its defence spending" to meet the costs of better living standards for servicemen and the modernization of its army.

All government fiscal expenditure in China, including military spending, should be implemented strictly according to the budget after the promulgation of the Budget Law, he said.

The budget for China's defence spending in 2002 was 166.204 billion yuan, or about US$20 billion, Kong said.

(China Daily July 26, 2002)