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The figure was revealed ahead of China's annual parliamentary session, which begins on Wednesday.
But experts believe the actual amount allocated to the Chinese military is two to three times larger than the published figure.
Critics also complain that China is not open enough about what it is spending the money on.
Most of this year's increase would be spent on increasing salaries and accommodating higher oil prices, said Jiang Enzhu, a spokesman for the National People's Congress.
He said spending on armaments would rise only moderately.
"China pursues a national defence policy that is defensive in nature," Mr Jiang said.
"China's limited military capability is solely for the purpose of safeguarding independence, sovereignty and territorial integrity, and does not pose a threat to any other country."
He added that China spent less on defence, as a proportion of GDP, than the US, UK, France and Russia.
(BBC)
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