China today announced an 8.1 per cent increase of its defence expenditure for this year amounting to USD 175 billion, which is over three times higher than India's defence budget.

China will raise its defence budget by 8.1 per cent in 2018, according to a budget report to be submitted to the national legislature today, which is up from last year's seven per cent.

The 2018 defence budget will be 1.11 trillion yuan (USD 175 billion), state-run Xinhua news agency quoted the official documents submitted to the National People's Congress (NPC).

China last year increased the defence budget to USD 150.5 billion. China is the second largest spender on defence after the US. The defence budget of the US which is the highest in the world amounted to USD 602.8 billion.

The increase of China's defence budget to 8.1 per cent this year, is three times higher than India's latest defence budget of about USD 52.5 billion.

Though China announced its military spending at about USD 150.5 billion last year, observers say it is considerably higher, considering it is now building two more aircraft carriers in addition to the one already in service as well as addition of new jet fighters, including stealth fighter J-20.

Chinese Navy also expanded its global reach with flotilla ships sailing through the far-off oceans to expand China's influence.

The official media justified the increase to USD 175 saying that, although slightly higher than the previous two years, the growth rate is the third time to dip into the single digit since 2013, following 7.6 per cent in 2016 and 7 per cent in 2017.

China's defence budget takes up a smaller share of its gross domestic product (GDP) and national fiscal expenditure compared with other major countries, Zhang Yesui, spokesperson of the NPC told media here yesterday.

Its military spending per capita is also lower than other major countries, Zhang said.

"A large part of the growth of the defence budget is to make up for the low military spending in the past and is mainly used to upgrade equipment and improve the welfare of servicemen and women and the living and training conditions of grassroots troops," he said.