China is to increase its defence budget in 2011, amid fears in the region that its military might is growing.
Spending will increase by 12.7% to 601.1bn yuan ($91.5bn; £56.2bn) up from 532.1bn yuan last year, a government spokesman has said.
Some analysts say the real numbers could be higher.
The announcement comes a day ahead of the annual National People's Congress, at which the Communist Party will outline its five-year plan.
China has been building up its military in recent years.
The defence budget was increased by 7.5% in 2010, after double-digit jumps in previous years.
However, Chinese parliamentary spokesman Li Zhaoxing said the increase was justified.
"China's defence spending is relatively low by world standards," Mr Li said.
"China has always paid attention to restraining defence spending," he added.
China has often pointed out that its defense budget is much less than that of the US.
However, that does not seem to be easing the fears of countries in the region such as Japan and Taiwan, which are embroiled in territorial disputes with China.
"China's modernisation of its military and increased activity is, along with insufficient transparency, a matter of concern," Yuki Edna, Japan's chief cabinet secretary, said on Thursday.
Relations have been strained between China and Japan over disputed isles in the South China Sea where there are large potential reserves of oil and gas.
"There is no two ways about the fact that China's military is getting much more powerful," said Duncan Innes-Kerr of the Economist Intelligence Unit in Beijing.
"Its ability going forward to overwhelm opponents is clearly increasing," he added.
However, analysts say there is a low chance of a military conflict over disputed territories in the region.
"Territorial claims are a secondary concern for China compared to domestic economic growth and stability," said Mr Innes-Kerr.
That focus on the economy is expected to become evident as the National People's Congress begins on Saturday.
While Friday is all about China's growing military power, the annual meeting of policy makers is expected to be much more about China's social and economic development.
The BBC's Beijing correspondent, Martin Patience, says tackling inequality is expected to be a key focus of the new five-year plan.
New social service programmes and spending on education will also be some of the measures likely to be revealed.
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