China will raise its defence spending by seven to eight percent this year, a top official said Friday, a smaller increase than the double-digit rises of the past as Beijing seeks a more efficient military.

At the same time the rising power is increasing its military heft and asserting its territorial claims in the South China Sea, raising tensions with its neighbours and with Washington.

"China's military budget will continue to grow this year but the margin will be lower than last year's and the previous years," said Fu Ying, spokeswoman for the National People's Congress (NPC), the Communist-controlled parliament.

"It will be between seven and eight percent."

The exact increase will be announced on Saturday at the opening of the NPC, Fu told reporters.

The reduced increase comes as China under President Xi Jinping seeks to craft a more efficient and effective People's Liberation Army (PLA), the world's largest standing military.

It unveiled a revamped military structure at the start of the year, establishing a new army general command and a Rocket Force to oversee its strategic missiles.

At a giant military parade in Beijing last year to commemorate the 70th anniversary of Japan's World War II defeat, Xi announced the PLA would be reduced by 300,000 personnel.

The parade also saw more than a dozen "carrier-killer" anti-ship ballistic missiles rolling through the streets of the capital, with state television calling them a "trump card" in potential conflicts and "one of China's key weapons in asymmetric warfare".

Analysts say that for a fraction of the cost of an aircraft carrier -- for decades the mainstay of Washington's ability to project power around the world -- the DF-21D missile threatens to alter the military balance in the Pacific.

At the parade, Xi said China's troops would "carry out the noble mission of upholding world peace", faithfully protect national security, and would never "seek hegemony".

Fu said Friday the country was "pushing forward military reform" to achieve those goals.

The military budget was determined by both China's defence needs and the national economic situation, she added -- the country saw its weakest growth in a quarter of a century last year.

In 2015 the budget was increased by 10.1 percent, bringing it to 886.9 billion yuan ($141.4 billion at the time).

"Xi Jinping will be determined to increase the military capabilities of the PLA in spite of the slowing growth of China's economy," James Char, a researcher at the S. Rajaratnam School of International Studies in Singapore, told AFP.

"More money is required to facilitate the troop reduction in terms of the remuneration packages and compensation to those affected by the cuts."

Char and many other analysts believe China's actual military spending is significantly higher than officially publicised.

- 'Aircraft and warships' -

At the same time, Beijing is looking to increase its own naval strength and reach, and officials confirmed in December that its second aircraft carrier -- the first to be entirely domestically designed and built -- was under construction.

Work has started on a logistics facility in Djibouti, in the Horn of Africa, the defence ministry said last week.

Relations with US treaty ally Japan have soured in recent years in a row over disputed islands in the East China Sea controlled by Tokyo.

Most controversially, Beijing has built up artificial islands in the South China Sea -- through which a third of the world's oil passes, and which it claims almost in its entirety.

Several other littoral states have competing claims, as does Taiwan.

Satellite pictures show what US analysts say are deployments of surface to air missiles and facilities with military uses, such as runways and radar.

Washington says Beijing's actions threaten freedom of navigation in the strategically vital waterway, and it has sent warships to sail within 12 nautical miles of the new islands -- the normal territorial limit around natural land -- to assert that right.

Last week, US Pacific Command chief Admiral Harry Harris warned that China was changing the "operational landscape in the region", and has called for more such patrols and flyovers.

Beijing defends its actions as within its sovereign rights and denies Washington's accusations.

"If you want to talk about militarisation, if you take a closer look, is it not the United States that is deploying the most advanced aircraft and warships?" Fu said.

"Right now what the US is doing and saying makes people feel like it is stimulating tensions."