China says defense budget to rise, warns Taiwan

By Lindsay Beck

BEIJING (Reuters) - China will raise its heavily scrutinized defense spending by nearly a fifth this year, a top official said on Tuesday, warning self-ruled Taiwan that Beijing would "tolerate no division".

Jiang Enzhu, spokesman for China's National People's Congress, or parliament, stressed that China adhered to a path of peaceful development and said the money would be used to raise the pay of service personnel, improve training and upgrade military equipment.

"China pursues a national defense policy which is defensive in nature," Jiang told a news conference. "China's limited military capability is solely for the purpose of safeguarding independence, sovereignty and territorial integrity, and will not pose a threat to any country."

The planned allocation for the People's Liberation Army for 2008 was 417.769 billion yuan ($58.76 billion), up 17.6 percent on 2007.

U.S. officials have said China's growing might is aimed at Taiwan, the island Beijing regards as its territory and whose March 22 presidential election it will watch closely.

Jiang called the situation in the Taiwan Strait "grim and complex" and said a plan by Taiwan leader Chen Shui-bian to hold a referendum on election day on whether to seek U.N. membership under the name "Taiwan" was tantamount to a poll on independence.

"China's sovereignty and territorial integrity tolerate no division," Jiang said.

"We are fully prepared to repulse any adventurous activities towards Taiwan independence and to prevent anyone from separating Taiwan from China under any name or by any means."