Beijing: China will raise its defence spending by 7.6 percent this year, a budget report to the country’s Communist-controlled parliament showed on Saturday, a smaller increase than past years as it seeks a more efficient military.

It was the ‘lowest defence budget increase in six years’, the official news agency Xinhua said, adding it came ‘in the wake of rising economic headwinds and last year’s massive drawdown of service people’.

The comment was a reference to cut of 300,000 personnel in the People’s Liberation Army (PLA), still the world’s largest standing military, announced by President Xi Jinping at a giant military parade in Beijing last September to commemorate the 70th anniversary of Japan’s World War II defeat.

China’s total declared spending of 954 billion ($146 billion) remains far below that of the United States.

Beijing is looking to create a more effective fighting force and it increases its military heft and asserts its territorial claims in the South China Sea, raising tensions with its neighbours and with Washington.

The country will seek to ‘strengthen the military in all respects so that it is more revolutionary, modern, and standardised’, the budget report said.

At the start of the year, the Asian giant unveiled a revamped military structure, establishing a new army general command and a Rocket Force to oversee its strategic missiles.

Chinese Premier Li Keqiang was to tell the opening session of the parliament: ‘We will 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 defence control.

‘We should strive to forge an ever closer bond between the military and the government,’ the text of his speech read.

Beijing has built up artificial islands in the disputed South China Sea — through which a third of the world’s oil passes, and which it claims almost in its entirety.

Several other littoral states have competing claims, as does Taiwan.

Satellite pictures show what US analysts say are deployments of surface to air missiles and facilities with military uses, such as runways and radar.

At the same time, Beijing is looking to increase naval strength and reach, and officials confirmed in December that its second aircraft carrier — the first to be entirely domestically designed and built — was under construction.

In 2015, the defence budget was increased by 10.1 percent.

Many analysts believe that China’s actual military spending is significantly higher than officially publicised, a position echoed by James Char of the S. Rajaratnam School of International Studies in Singapore.

‘Xi Jinping will be determined to increase the military capabilities of the PLA in spite of the slowing growth of China’s economy,’ he told AFP.