China says its defense budget will rise 11.2 percent in 2012 to $106.7 billion, as strong economic growth continues to fuel rapid military expansion.

Chinese parliamentary spokesman Li Zhaoxing told reporters Sunday that defense spending would increase about $10.6 billion over actual spending in 2011.

Li said “China has 1.3 billion people, a large territory and long coastline, but [its] defense spending is relatively low compared with other major countries.”

China's military budget is the second-largest in the world, after the United States.

Beijing's rapid military build-up has raised concerns across Asia and in Washington, although Beijing maintains that its military modernization is purely defensive.

The U.S. Defense Department released a report late last year saying the Chinese build-up appears aimed at preventing outside powers from interfering in any possible future conflict with Taiwan.