BEIJING: China said on Saturday it will raise military spending by 7.6 percent this year, its lowest increase in six years, as the premier vowed to push on with a modernisation plan that will shrink staffing.

The 954.35 billion yuan ($146.67 billion) figure is only around one-quarter of the U.S. Defense Department budget for 2016 of $573 billion, but comes at a time of rising concern over China's intentions in territorial disputes such as the South China Sea.

The increase is the first single-digit rise since 2010, following a nearly unbroken two-decade run of double-digit jumps, and comes as China's economy slows.

It was announced on Saturday at the start of the annual meeting of parliament, but had been flagged by an official the previous day who gave a rough figure.

President Xi Jinping is seeking to drag the People's Liberation Army, the world's largest armed forces, into the modern age, cutting 300,000 jobs and revamping its Cold War-era command structure.

However, the reforms have run into opposition from soldiers and officers worried about job security, and few details have been released as to what will happen to those laid off.

Premier Li Keqiang told the opening of China's largely rubber-stamp parliament that the country will "strengthen in a coordinated way military preparedness on all fronts and for all scenarios".

"We will work to make the military more revolutionary, modern and well-structured in every respect, and remain committed to safeguarding national security," he said.

"We will make steady progress in reforming military leadership and command structures and launch reform of the military's size and structure as well as its policies and institutions."

The official Xinhua news agency attributed the slowdown in the pace of defence spending to "rising economic headwinds and last year's massive drawdown of service people".

Beijing is also feeling public pressure to show it can protect its claims to the South China Sea after the United States began conducting "freedom of navigation" operations near islands where China has been carrying out controversial reclamation work and stationing advanced weapons.

The Global Times, a widely-read tabloid published by the ruling Communist Party's People's Daily, said that for many Chinese the smaller increase "was a bit of a disappointment", but called for understanding.

"There is no need to spend hugely to catch up with the U.S., which seeks to keep its global military presence. China's regional military deterrence aimed at national defence has been taking shape."