Beijing: China today (Mar 5, 2004) pledged to step up modernisation of its over two-million-strong military with advanced weaponry to face "high-tech conditions", indicating that a hike in its Defence budget is imminent.

"Stepping up efforts to modernise our national Defence and Armed forces is an important guarantee for safeguarding national security and building a moderately prosperous society in all respects," Chinese Premier Wen Jiabao said in his maiden state of the nation address.

He also announced cutting down strength of Armed forces by 200,000 by 2005.

China watchers believe that Jiabao's speech indicated an imminent hike in its Defence expenditure this year when the general budget is presented to the National People's Congress (NPC), China's Parliament, on Saturday (Mar 6, 2004).

In 2003, China hiked its Defence outlay by 9.6 per cent to 185.3 billion Yuan ($ 22.43 billion).

China will work painstakingly to adjust and realign its military strength to ensure that the Armed forces are reduced by 200,000 troops and that related tasks are completed by 2005, he said.

"We will vigorously support the strengthening of national Defence and the Armed forces and we will build up the militia and reserve forces to develop a fully functioning national Defence mobilisation system that is highly effective and can respond rapidly," he said.

As part of the strategy of using science and technology to build a strong Armed force, China will focus on developing new and high technology weaponry and promote modernisation of the Armed forces, he said.