China's official defence spending will rise by 11.2% in 2012, pushing it above $100bn (£65bn) for the first time, the government has announced.
Beijing's defence budget has risen each year for two decades to become the world's second-biggest, behind the US.
It is developing an aircraft carrier, a stealth fighter jet, and missiles that can shoot down satellites.
The US promised to bolster its presence in the region last year, in a move seen as countering China's dominance.
Washington, which spends about $740bn on defence each year, already has bases housing thousands of American troops across the region.
The BBC's Martin Patience in Beijing says Chinese officials remain wary about growing American influence in the region, and believe Washington wants to encircle China.
'Peaceful development'
China's emerging military might has especially worried its near neighbours.
China has long-running territorial disputes with Vietnam, the Philippines and Japan, and has also positioned hundreds of missiles for a potential attack on Taiwan, which it views as part of its territory.
Continue reading the main story Big military spenders - official figures
- US: $739.3bn
- China: $106bn
- UK: $63.7bn
- Russia: $52.7bn
- India: $31.9bn
Sources: IISS; Chinese government
Announcing the new budget, Li Zhaoxing, an official with China's parliament, sought to calm concerns over the spending programme.
"China is committed to the path of peaceful development and follows a national defence policy that is defensive in nature," he said.
"China has 1.3 billion people, a large territory and long coastline, but our defence spending is relatively low compared with other major countries."
As a proportion of its GDP, China's official military budget is far lower than either the US or the UK.
But foreign experts have estimated that Beijing's actual military spending could be as much as double the official budget.
During 2011, China carried out its first test flight of a stealth fighter jet, and the first sea trial of its aircraft carrier.
Both pieces of equipment remain years away from active deployment.
Beijing is also building new submarines and ships, and developing a range of anti-ship ballistic missiles.
The armed forces, known as the People's Liberation Army, boasts more than two million personnel - the biggest military in the world.
China military budget tops $100bn for first time
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Originally Posted by Papay
ing huge, 20x the population of the UK and just twice it's military budget. Let them increase it another 10 times over, I don't mind.
