China on Tuesday increased its defence budget by 7.2 per cent to USD 232 billion as it continues with the massive modernisation of its military amid prevailing tensions over Taiwan, the disputed South China Sea as well as border frictions with India.

China, which is the second highest spender on defence after the United States, has allocated 1.67 trillion yuan (about USD 232 billion) for defence spending.

The increase in terms of the percentage was the same as last year.

China last year hiked its defence budget by 7.2 per cent to 1.55 trillion yuan (about USD 225 billion), marking the eighth consecutive year of increase in its military spending.

Like its previous budgets, this year's defence budget of China was almost three times higher than that of India.

India's defence allocation this year amounted to Rs 6,21,541 crore (about USD 74.8 billion).

China has simmering territorial disputes with some of its neighbours.

China views Taiwan as a rebel province that must be reunified with the mainland, even by force.

Beijing claims most of the South China Sea, while the Philippines, Vietnam, Malaysia, Brunei and Taiwan have counterclaims.

In recent months, tensions simmered between China and the Philippines as Manila, backed by the US, stepped up efforts to assert its rights over the part of the South China Sea firmly resisted by the Chinese coast guard ships.