China's official defence spending will rise by more than 11% this year, pushing it above $US100 billion for the first time.
Beijing's defence budget has risen each year for two decades to become the world's second-biggest, behind the United States.
It is developing an aircraft carrier, a stealth fighter jet and missiles that can shoot down satellites. The People's Liberation Army has more than two million personnel.
Last year the US promised to bolster its presence in the region, in a move seen as countering China's dominance.
Washington, which spends about $US740 billion on defence each year, already has bases across the region.
The BBC says Chinese officials remain wary about growing American influence in the region, and believe Washington wants to encircle China.
China has long-running territorial disputes with Vietnam, the Philippines and Japan. It has also hundreds of missiles positioned for a potential attack on Taiwan, which it views as part of its territory.
As a proportion of its GDP, China's official military budget is far lower than either the US or the UK.
But foreign experts have estimated that Beijing's actual military spending could be as much as double the official budget.