2nd Ld Writethru-China Focus: China announces 7.6-pct defense budget rise, lowest in six years

China on Saturday announced the country's lowest defense budget increase in six years in the wake of rising economic headwinds and last year's massive drawdown of service people.

According to a budget report to the national legislature annual session, the government plans to raise the 2016 defense budget by 7.6 percent to 954 billion yuan (about 146 billion U.S. dollars).

The increase last year was 10.1 percent.

The fresh raise will make the world's second largest economy the second largest defense spender, both next to the United States which, in the exact words of U.S. President Barack Obama, spends more on military "than the next eight nations combined."

Obama proposed a 534-billion dollar defense budget package for the 2016 fiscal year, about 3.6 times China's budget this year. This year's new increase will do little to close that gap.

China's military expenditure had seen a five-year run of double-digit increases between 2011 and 2015. The country saw the defense budget growing by 7.5 percent in 2010.

Friday's report did not offer further breakdown of the figure nor explain the rationale behind the abated growth, although some officials and military experts have pointed to slowing growth in the world's second largest economy.

Maj. Gen. Chen Zhou linked the forecast-beating slowdown with China's "economic and social status quo" in an interview with Xinhua.

"A single-digit rise following years of double-digit growth is a prudent, moderate move," said Chen, also an NPC deputy, adding that there are no "hidden" expenses in the country's military spending.

Faced with increasing economic headwinds with uncertainty clouding global recovery, China saw its economy expanding 6.9 percent year on year in 2015, the slowest in a quarter of a century, weighed down by a property market downturn, falling trade and weak factory activity.

The government put this year's growth target between 6.5 and 7 percent, compared with last year's "approximately 7 percent" goal.

The cut of 300,000 service people announced by Chinese President Xi Jinping in September might also have helped drive down the defense budget growth figure.

China will make its military more revolutionary, modern and better structured, strengthen in a coordinated way military preparedness on all fronts and for all scenarios and work meticulously to ensure combat readiness and border, coastal and air defense control, Premier Li Keqiang said in the government work report to the national legislature annual session.

Logistics and equipment development will be stepped up and the military's size and structure will undergo reforms, he said.

To modernize management and administration, the PLA inaugurated a General Command for the army, the PLA Rocket Force and the PLA Strategic Support Force in December. In February, it replaced seven military area commands with five PLA theater commands.

"The PLA is in the key phase of deepening reforms," Maj. Gen. Luo Yuan said.

"A moderate increase in the military budget is necessary," he said.

Both Chen and Luo shrugged off concerns from Western observers over China's growing military spending.

Though recent rises in defense budgets surpassed GDP growth, China's military expenditure in 2015 accounted for 1.33 percent of GDP, well below the world's average of 2.6 percent.

The per capita military spending is even less, representing only about 5.6 percent that of the U.S., 11 percent that of Britain and 25 percent that of Japan, Chen said. Endi