China boosts military budget by 7 per cent to USD 148 bn : Asia, News - India Today PTI New York, February 4, 2014 | UPDATED 13:52 IST China will significantly increase its defence budget and spend USD 148 billion on its military this year, second only to the US, a surge driven by escalation in tensions with its neighbours over longstanding territorial disputes, according to a media report. The increase in military spending comes even as defence budgets at the Pentagon and in many NATO countries shrink. Even the budget for the US military, while more than that of China's, has seen a decline due to budget cuts. The New York Times cited a report by defence industry consulting and analysis company IHS Jane's, which said that China's People's Liberation Army is gearing up for a surge in new funding and will spend USD 148 billion on its military this year, up from USD 139.2 billion in 2013. The US is expected to spend USD 574.9 billion this year but that is down from USD 664.3 billion in 2012 after budget cuts slashed spending. China will continue to increase its military spending and by next year it is projected that it will spend more on defence than Britain, Germany and France combined. IHS said by 2024, China will spend more than all of Western Europe. "The surge in weapons spending by Beijing military outlays this year are set to be a third higher than in 2009 ? has come in tandem with an escalation in tensions with its neighbours over longstanding territorial disputes," it said. Through the additional billions of dollars, China is adding world class military equipment to its arsenal. In 2012, it commissioned its first aircraft carrier the Liaoning built from the hull of an uncompleted ship ordered by the Soviet navy in the 1980s. In 2011, a Chinese-made aircraft with stealth radar- evading capabilities flew on a test flight as the then US defence secretary Robert Gates was in Beijing. China is set to release its military spending for 2013 and its forecast for this year at the annual session of the National People's Congress next month in Beijing. Military analyst Ian Easton of the Project 2049 Institute in Arlington however said China?s military is far less capable than its large military budget would suggest. Chinese troops also lack real combat experience and some of the army's projects, including the aircraft carrier, are plagued by technical problems.