China announced Sunday (Mar 5) an increase in its military spending while warning of "escalating" threats from abroad, at a meeting of its parliament that is set to hand Xi Jinping a third term as president.

The increase in the world's second-largest defence budget came as China's leaders said it would aim for economic growth of around 5 per cent for the coming year - one of its lowest in decades.

As the country unveiled the 1.55 trillion yuan (US$225 billion) budget, outgoing Premier Li Keqiang told delegates to the National People's Congress (NPC) that "external attempts to suppress and contain China are escalating".

"The armed forces should intensify military training and preparedness across the board," he said.

The military, he added, must "devote greater energy to training under combat conditions, and ... strengthen military work in all directions and domains".

This year's hike in defence spending marks the eighth consecutive single-digit increase. As in previous years, no breakdown of the spending was given, only the overall amount and the rate of increase.

Beijing is nervous about challenges on fronts ranging from Taiwan to US naval and air missions in the disputed South China Sea near Chinese-occupied islands.

China staged war games near Taiwan last August to express anger at the visit to Taipei of then-US House Speaker Nancy Pelosi.

Li Mingjiang, associate professor at S Rajaratnam School of International Studies in Singapore, said defence spending outpacing the economic growth forecast showed China anticipates facing greater pressures in its external security environment, especially from the United States and on the Taiwan issue.

"Chinese leaders are clearly intensifying efforts to prepare the country militarily to meet all potential security challenges, including unexpected situations," he said.

China, with the world's largest military in terms of personnel, is busy adding a slew of new hardware, including aircraft carriers and stealth fighters.