Despite nearly two decades of annual double-digit economic growth, social stability in China has remained a challenge due to massive urbanisation, rising expectations and a widening gap between rich and poor.

Public security spending will increase by 11.5 percent to 701.7 billion yuan, more than the 670 billion yuan earmarked for national defence, the finance ministry said in its 2012 budget.

The announcement came after Premier Wen Jiabao listed the challenges facing his government and pledged to maintain stability in his annual report to the National People's Congress (NPC), China's parliament.

"Problems concerning land expropriation, housing demolition, workplace safety, food and drug safety, and income distribution are still very serious and the people are still very concerned about them," Wen said.

"To promote harmony, we will properly balance reform, development and stability, effectively defuse various types of conflicts, risks and dangers, prevent isolated problems from growing into major ones and promote social harmony and stability."

Wen also pledged to crack down on corruption, another key cause of social unrest.

Maintaining stability is a key priority for the Communist Party ahead of a 10-yearly leadership transition that will see President Hu Jintao, Wen and other top leaders stepping down from their party posts this year.

Last year, police forces in China were placed on high alert following the uprisings against authoritarian governments in the Arab world.

Public security spending in China covers police, state security, paramilitary police, courts and jails.

According to studies published by the China Academy of Social Sciences, the numbers of "mass incidents," or public protests, in China grew from 8,700 in 1993 to more than 90,000 in 2006.

Such incidents range from protests involving only a few dozen people to large street demonstrations with thousands of protesters.

Tokyo's top government spokesman urged China's leaders to greater transparency on military issues and pledged Japan would be closely watching what happened across the water.

"We are concerned about the double-digit increase in this year's Chinese defence budget and will pay attention to future developments," Chief Cabinet Secretary Osamu Fujimura told a news conference in Tokyo.

"Some details of China's defence budget are still opaque," Fujimura said. "Our country will continue asking China to boost transparency through an exchange of dialogue in the field of security."

Fujimura was speaking as Chinese Premier Wen Jiabao urged his military to boost its capacity to win "local wars" amid a ramping up of tensions with neighbours -- including Japan -- over a series of territorial disputes.

Wen made his comments at the opening of the National People's Congress (NPC), China's parliament, a day after the government announced military spending would top $100 billion in 2012 -- an 11.2 percent increase on last year.

Japan's left-leaning Asahi Shimbun, quoting what it called "a high-ranking Chinese military officer", cast doubt on the veracity of previously announced budgets, claiming real spending was higher.

It cited the unnamed officer as saying China's defence budget last year was 1.7 times what it announced and this year's spending plan could also "fall considerably below actual defence spending".

In a front-page article, the daily said Beijing's exclusion of some of the costs of development and production of next-generation stealth fighters and antiship ballistic missiles meant the budget did not reflect real expenditure.

The paper said it was in Beijing's interests to be more honest.

"Chinese leaders must understand that blurring the reality of the expansion of China's power helps spread the idea that it is a threat to the world," the daily said in an editorial.

"China is becoming a superpower," it said. "It is not suitable that such a big country remains inward-looking."

Japanese daily Sankei Shimbun said in a story out of Beijing that US and European defence organisations share the view that China's "stealth" defence spending was up to three times the size of the announced military budget.

Japan has long expressed concern over China's growing assertiveness and widening naval reach in the Pacific and over what it calls the "opaqueness" of Beijing's military budget.

Relations between Tokyo and Beijing are often tested by history and by spats over disputed islands in the East China Sea that are believed to be rich in resources.