China set to announce sharp increase in defence spending
Soldiers of China's People's Liberation Army (PLA) march past Tiananmen Gate during the military parade marking the 70th anniversary of the end of World War Two, in Beijing, China, September 3, 2015 Reuters

China is set to announce a steep hike in military spending in the backdrop of the armed forces' unhappiness over reforms and the rising tensions in South and East China Seas.

China's People's Liberation Army has been pushing for a 30 percent increase in spending this year, a source with ties to the military told Reuters. The actual rise will not be that high, though, given the economic slowdown in the county and the GDP growth slowing into single digits.

Beijing's military spending last year was over 10 percent of the budgetary spending, at $136.4 billion. China's parliament is set to announce another double-digit rise in military spending in its meeting next month.

China has initiated an ambitious plan to modernise the PLA, with President Xi Jinping announcing a massive 300,000 job cuts and the decision to dismantle the Cold War-era command structure.

However, the reforms have rattled the powerful army establishment, with soldiers and officers threatened by the job cuts.

The People's Liberation Army Daily, a PLA mouthpiece, had revealed the discontent among its ranks last month saying some soldiers were "lost in hesitation".

"The party has got to show the troop cuts don't mean the military is being ignored or shunted aside," the source told Reuters.

"Xi has to keep them on side as there's so much unhappiness and uncertainty in the ranks."

The army's morale is vital for Xi after he ratcheted up China's aggressive stance in the South and East China Sea conflicts.

Beijing is also under public pressure to re-assert its position of strength in the South China Sea after the US started showcasing its "freedom of navigation" operations in the region.