The Defense Agency will closely monitor how China uses its defense outlays in fiscal 2001, which are expected to rise nearly 18 percent from the current fiscal year, agency chief Toshitsugu Saito said Friday.
"It is true that China has increased (its defense spending) more than 10 percent annually for the last several years. But (the proposed figure) is fairly high," Saito said.
He said China's plans to modernize weapons will mark a new trend in its defense spending.
Chinese Finance Minister Xiang Huaicheng on Tuesday proposed setting aside 141 billion yuan (about 2 trillion yen) for defense spending in fiscal 2001, which began in January, up 17.7 percent from a year earlier. If approved, the budget would mark the 13th consecutive double-digit increase in defense spending.
The defense chief said Japan plans to ask Beijing to clarify the amount of the country's defense spending, noting that China earmarks funds for developing new defense equipment in a separate account.
On Tuesday, the Foreign Ministry presented to the ruling Liberal Democratic Party a draft annual white paper on foreign aid saying Japan should more clearly stipulate its priorities for financial assistance to China.
Some LDP officials have argued that Japan, China's top donor, should review its aid to Beijing, considering the high growth in China's defense outlays.