Seoul: South Korea plans to sharply increase spending on defence next year, local media reported, as regional tensions mount following a North Korean artillery attack and differences between China and the United States.
The Korea Economic Daily said the government had proposed a 5.8 percent increase in the 2011 defence budget to about USD 27 billion to buy more self-propelled artillery and fighter-bombers, far more than the 3.6 percent rise this year.
It said Parliament could approve an even higher amount, given this week`s shelling by North Korean forces of a Southern island near the disputed maritime boundary.
Regional giant China, reclusive North Korea`s only major ally, has said it is determined to prevent an escalation of the violence but warned against military acts near its coast as US and South Korean forces prepared for exercises in the Yellow Sea.
North Korea, stepping up its rhetoric, said the four-day naval drills starting on Sunday risked pushing the region toward war.
The US military said the exercises, planned long before Tuesday`s attack, were designed to deter North Korea and were not aimed at China.
The United States is sending an aircraft carrier group led by the nuclear-powered USS George Washington for the manoeuvres with South Korea.
"We`ve routinely operated in waters off the Korean peninsula for years," said Captain Darryn James, a Pentagon spokesman. "These latest provocations have been by the North and they need to take ownership of those, not us."
Not a guy we can trust
US Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, said North Korea`s nuclear ambitions and leader Kim Jong-Il`s unpredictability increased the threat of regional instability.
"It`s hard to know why China doesn`t push harder," Mullen told CNN television`s Fareed Zakaria GPS, in comments due to air on Sunday. "My sense is they try to control this guy. And I`m not sure he is controllable."
"He`s not a guy we can trust," Mullen said. "That`s why the leadership aspect of this from China is so important, because if any country has influence in Pyongyang, it`s China," he said.
North Korea has entered an unpredictable period of leadership transition with the elevation of Kim Jong-Il`s youngest son, Kim Jong-Un, in September to the rank of general -- in a clear sign he is the chosen successor.
Mullen has said he believes the artillery attack and the sinking in March of a South Korean warship, which the United States and South Korea blamed on the North, is likely linked to Kim Jong-Il`s "posturing" to allow the eventual succession.
Calling for calm after the attack, Chinese Foreign Minister Yang Jiechi met North Korean Ambassador Ji Jae Ryong in Beijing and talked by phone with US Secretary of State Hillary Clinton and South Korean Foreign Minister Kim Sung-hwan.
"The top priority now is to keep the situation under control and to ensure such events do not happen again," the Chinese Foreign Ministry said in a statement.
North Korean artillery shells rained down on the small South Korean island of Yeonpyeong on Tuesday, killing four people and destroying dozens of houses. South Korean troops fired back 13 minutes later, causing unknown damage.
"The situation on the Korean peninsula is inching closer to the brink of war due to the reckless plan of those trigger-happy elements to stage again war exercises targeted against (North Korea)," the North`s KCNA news agency said.
The language was typical of North Korean state media but the increasing tension depressed South Korea`s currency and its stock market, which both closed sharply lower on Friday.
"Investors are growing more jittery ahead of the joint military exercise," said Kim Hyoung-ryoul, a market analyst at NH Investment & Securities. "The key concern is whether North Korea will again take unforeseen, rash actions."