China is set to increase its defense budget to cover massive layoffs, military reorganization, and various projects in defense of its territories in the East and South China Seas.

China is reportedly drawing up a much higher budget this year with a 20 percent increase to fund the military's modernization and its defense activities in the disputed international waterway.

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The proposed budget, which would be made public during the annual National People's Congress on Saturday, would be the highest since 2007, according to a government official who spoke on condition of anonymity.

                                                         20 percent increase

"I think even an increase of 20 percent would be acceptable this time, even though would be the highest since 2007," the government official said.

Some critics had questioned the rationale behind increasing the military budget when President Xi Jinping announced in September last year that  300,000 military personnel would be slashed from the force by 2017. This reduction notwithstanding, the People's Liberation Army (PLA) will still be the largest military force in the world at 2 million, the official noted. Therefore, Beijing still has to shell out money for the layoff expenses, modernization costs, and improvement of the Army's efficiency.

                                                         Troop reduction

"A big reduction in troops doesn't mean the PLA will cut the budget immediately, as it should allocate a certain proportion of spending for retirement pay or other layoff compensation in the coming two years," the official said.

Reports indicate that the defense budget will also account for the expenses China will incur in maintaining security and defending its reclaimed islands and reefs in the disputed  South China Sea

China military spending in 2015 slowed - with only a 10.1 percent increase; the lowest in five years

                                                        Defense spending

In the same year, China's defense spending was a mere fraction of what the US spent on its military. The Pentagon spent $597 billion for defense and military resources while China spent $135.5 billion in 2015.

Despite the slowdown in spending, China has managed to build seven islands, ports, three airstrips and other facilities in the disputed South China Sea.

US Pacific Command Commander Harry Harris has warned that China's activities in the South China Sea region are threatening freedom of navigation.

The Admiral said that the US will continue naval and aerial patrols in the South China Sea region despite China's protests. 

Tagsdefense budget, military spending, South China Sea, Pacific Command, china