On Sunday, China raised hackles by announcing military spending, which has grown by leaps and bounds in recent years, would rise 17.8 percent in 2007 to 350.9 billion yuan (about 45 billion dollars).

Premier Wen Jiabao said Monday that China would continue to strengthen its armed forces.

A government report said the increase would enable China to "fight a defensive war under hi-tech conditions and respond to emergencies."

But the White House expressed concern.

"This kind of spending not only concerns us but raises concerns among China's neighbors. This is inconsistent with China's policy of peaceful development," said national security spokesman Gordon Johndroe.

US Vice President Dick Cheney made similar comments in February, citing the spending and China's shooting down of a satellite with a missile in January.

Analysts have said Beijing is beefing up its military in part to be able to take back the island of Taiwan by force if necessary.

China and Taiwan have been separated since the end of a civil war in 1949, but Beijing still considers the island part of its territory and bridles at the pro-independence sentiment of its current president Chen Shui-bian.

earlier related report
China says military poses no threat
Beijing (AFP) March 6 - China on Tuesday brushed aside foreign concern over its military build-up, insisting that it was a force for peace and stability in the world. "China pursues an independent foreign policy of peace. It safeguards its own lawful rights and interests, and also respects the lawful rights and interests of other countries," Foreign Minister Li Zhaoxing told reporters.

"We will always be a force for peace, cooperation and development."

On Sunday, China raised hackles overseas by announcing that military spending, which has grown by leaps and bounds in recent years, would rise another 17.8 percent in 2007 to 350.9 billion yuan (about 45 billion dollars).

The United States, which has repeatedly said it believes China vastly under-reports its military budget, voiced alarm at the publicly disclosed hike in spending.

"This kind of spending not only concerns us but raises concerns among China's neighbors. This is inconsistent with China's policy of peaceful development," US national security spokesman Gordon Johndroe told AFP.

"We hope they will demonstrate more transparency in the future." US Vice President Dick Cheney expressed similar concerns last month, citing the steady military buildup and China's shooting down of a satellite with a missile in January.

Li said Tuesday that China had nothing to hide.

"We pursue a national defence policy (of) ... increased military transparency," he said at a press conference in the capital's Great Hall of the People, where China's parliament is holding its annual session.

In an address to parliament on Monday, Premier Wen Jiabao vowed that China would continue to strengthen its armed forces.

"Building a solid national defence system and a powerful people's army is a strategic task in socialist modernisation," Wen said.

Chinese military officials and outside analysts have said Beijing is beefing up its armed forces in part to be able to take back the island of Taiwan by force if necessary.

China and Taiwan have been separated since the end of a civil war in 1949, but Beijing still considers the island part of its territory and bridles at the pro-independence sentiment of its current president Chen Shui-bian.

earlier related report
US sees China as top intelligence threat: report
Washington (AFP) Mar 06 - China's intelligence services are the most active in the world in spying on the United States and are aggressively targeting advanced technology, a senior US intelligence official said in remarks published Tuesday. Joel Brenner, the new head of the Office of National Counterintelligence Executive, told the Washington Times that the intelligence services of Cuba, Russia and Iran are next in line.

"These services are eating our lunch," Brenner was quoted as saying.

Chinese intelligence is conducting a "very aggressive" campaign to acquire advanced US technology, often acquiring it before it is fully developed, Brenner said.

"The technology bleed to China, among others, is a very serious problem," he was quoted as saying, adding that the FBI is improving its efforts to identify and protect sensitive technology.

Brenner's office, known as the NCIX, is currently conducting a damage assessment of the case of Katrina Leung, a Los Angeles businesswoman and FBI informant who the government alleged in 2003 was a spy for Beijing.

Espionage charges against Leung were later dropped and she pleaded guilty to lesser charges in 2005.

But Brenner said Leung, who had a sexual relationship with two senior FBI counterintelligence agents, James J. Smith and Bill Cleveland, was being run as an agent by Chinese intelligence.

"That was an intelligence operation, and it was a very successful intelligence operation," he said. "It was a classic honey trap."

Brenner said he also is pushing for greater use of counter-intelligence techniques to target terrorist groups, and to devised ways to stop computer espionage.

Besides China, he said Cuba's intelligence services remain a major threat.

"They were trained by the KGB, and now they're training the Venezuelans," he said.

Russia's intelligence service remains "very aggressive" against the United States, and "the Iranians also have a mature and capable service," he said. All "are running significant operations against us," the Times quoted him as saying.

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