Beijing: China on Tuesday hiked its defence budget by 10.7 percent to USD 115.7 billion well above this year`s Indian defence spending of USD 37.4 billion.
The hike in the defence spending was announced as the Chinese legislature, the National People`s Congress (NPC) opened its annual session, which this year also marks the once-in-a-decade power transfer.
As per the budgetary papers placed at the NPC, a sum of 720.168 billion yuan was allocated for defence, which at the current exchange rate amounted to USD 115.7 billion.
The newly elected leader X Jinping and his fellow leaders would formally take over power from old guard headed by President Hu Jintao in the course of next ten days.
The budget proposals were announced by the outgoing Premier Wen Jiabao who presented a lengthy work report on the decade old achievements of his government.
The focus was mainly on the defence budget as China had officially allocated USD 106.4 billion last year making it one of the top defence spenders in the world.
The 10-percent hike this year comes when China is rapidly modernising its armed forces in the back drop of deepening stand-off with Japan over disputed islands as well as differences with several Southeast Asian countries over the South China Sea.
China launched its first aircraft carrier in 2012 as well as several versions of new jet fighters including a stealth fighter bracing to deal with big US military push into the Asia pacific.