China's defense expenditure has continued to increase moderately based on the economic development of and revenue growth of the country, so as to keep up with the changes in the demands of national defense, says a white paper issued Monday.

The country's defense expenditure in 2002 and 2003 was 170.778 billion yuan and 190.787 billion yuan respectively and its defense budget for 2004 is 211.701 billion yuan, according to the white paper on national defense issued by the Information Office of the State Council.

In the past two years, the percentages of China's annual defense expenditure to its gross domestic product (GDP) and to the state financial expenditure in the same period have remained basically stable. For most of the years since the 1990s, the growth rate of China's defense expenditure has been lower than that of the state financial expenditure.

"The increased part of it since the 1990s is mainly compensatory, which is set to compensate fund shortage in the military," said Deng Hongzhou, a military expert participating in the drafting of the white paper.

"This is a must for overall advancement of both national defense and the modernization of the military," he said.

According to the white paper, the increased part of China's defense expenditure has primarily been used for increasing the salaries and allowances of the military personnel, further improving the social insurance system for servicemen, supporting the structural and organizational reform of the military, increasing investment in the development of high-caliber talents in the military, and moderate increasing equipment expenses.

"The key lies in how the increased part has been used -- for defense or military expansion," said Deng. "Facts have shown that China adheres to its 'defensive' defense policy and firmly opposes hegemony and exterior expansion, thus China will pose no threat to any other countries."

Meanwhile, the absolute amount of China's defense expenditure has long been lower than those of some major Western countries, and the proportion to the GDP and state financial expenditure has also been relatively low.

According to the white paper, in 2003, China's defense expenditure amounted to only 5.69 percent of that of the United States, 56.78 percent of that of Japan, 37.07 percent of that of the United Kingdom, and 75.94 percent of that of France.

That shows that the increased amount of China's defense expenditure over the past few years is not as big as claimed by some Western countries.