This story is from our news.com.au network Source: Reuters back
China military budget up 12.6pc
March 04, 2005 CHINA'S military budget will rise 12.6 per cent this year to 247.7 billion yuan ($37.2 billion), parliament spokesman Jiang Enzhu told a news conference today.
He said the figure was contained in the Budget report to be presented to China's parliament, or National People's Congress, which opens its annual session tomorrow. China has boosted defence spending steadily in the past 15 years to transform the military into a high-tech force with the muscle to back its threat to attack rival Taiwan.
In the wake of 's March 26 announcement that it intends to build its first indigenous aircraft carrier, and recent American overtures aimed at greater defense cooperation to help make India a "major power," speculation is rife as to the future geopolitical consequences for the Asian region and the world.

India's rise to greater military power may serve as a counterbalance to  in the Asian region.  China is interested in developing a free trade pact with India and has made overtures in that direction, which are under consideration in India.

Indeed, China's military might is also increasing at a rapid rate as that nation's government commits an ever-greater percentage of its budget to national defense.
Nonetheless, the two nations are seeking a free trade agreement (FTA), which some observers have declared as having the potential to be "the most significant event of this decade" for the Asian region.