National People's Congress spokeswoman Fu Ying said China's total military spending will account for 1.3 percent of its projected gross domestic product in 2017.
Last year, the country's defense budget rose by 7.6 percent to 954 billion yuan (about 138 billion US dollars), breaking a multi-year run of double-digit increases.
The announcement marks the second consecutive year that the increase in China's defence spending has not reached a double-digit percentage rise following almost two decades at or above 10%.
Addressing worldwide concerns over China's growing military strength, Fu said: "Look at the past decade or so; there have been so many conflicts, even wars, around the world resulting in serious, large numbers of casualties and loss of property, so many refugees destitute and homeless. American actions in the South China Sea have a definite significance in terms of which way the winds blow", she said, adding that the "gap in capabilities" with the U.S. is "enormous". "China has never brought any harm to any countries".
China's economy expanded by 6.7 percent last year, a good start for the country's 13th Five-Year Plan (2016-2020), Wang Guoqing, spokesperson for the fifth session of the 12th National Committee of the Chinese People's Political Consultative Conference, told a press conference. It would mark a 10% rise than the previous year, if his budget plan is approved by the US Congress.
"We have to guard against external forces from getting involved in our territorial disputes", she told CNN.
"We need the ability to safeguard our sovereignty and interests and rights", Fu said.
But recent reports that Beijing may be militarising artificial islands in the South China Sea have raised concerns in Washington, which has long argued China's activities in the region threaten freedom of navigation through the strategically vital waterways, sending ships and aircraft to pass close to the growing islands.
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However, that is still only a quarter or so of the U.S. defense budget, which would amount to $603 billion if the 10 percent increase proposed by the White House is approved.
Her words were echoed by Major General Chen Zhou, who said China's defense budget increase is reasonable and moderate against the backdrop of "profound changes in China's overall strength, its security environment and the world's strategic situation".
"You should ask them what their intentions are", Fu added.
"So, even though it's a relatively small amount, this amount is fielding new capabilities for contingencies in the South China sea", Ong-Webb said.
Many experts estimate China's actual military spending is significantly higher than the published budgeted figures, which aren't thought to include big ticket items such as weapons purchases.
China's military build-up has rattled nerves around the region, particularly because Bejing has taken an increasingly assertive stance in its territorial disputes in the East and South China Seas and over Taiwan, which it claims as its own.
Meanwhile, White House spokesman Sean Spicer vowed in January that the US would stand up to China in the South China Sea.