China has been rapidly expanding its armed forces
China has said its military spending will increase by 7.5% in 2010, ending a long run of double-digit growth.
It will spend 532.1bn yuan ($77.9bn:£51.7bn) over the year, the spokesman of the country's annual parliamentary session announced.
Li Zhaoxing said that, as a proportion of GDP, China still spends less than other countries, such as the US.
Washington has repeatedly urged China to be more open about its rapidly rising military spending.
Speaking at a news conference, Mr Li claimed China was increasing transparency on this issue.
He said the extra money being spent on the military would help it meet various security threats, without specifying what those threats were.
But he added: "The only purpose of China's limited military strength is to safeguard China's sovereignty and territorial integrity."
According to Chinese figures, this is the first time in more than 20 years that the military budget increase has dipped below 10%.
By Michael Bristow, BBC News, Beijing
It is not instantly clear why, for the first time in more than 20 years, China's annual defence budget increase has fallen below 10%.
There could be a belt tightening following the world economic slowdown, or China might not want to scare its neighbours with another major increase in spending.
The man who announced this year's increase, parliamentary spokesman Li Zhaoxing, said China was now more transparent about its military budget. But he did not shed much light on why the increase was down this year.
And just to show the limits of China's transparency when it comes to the military, he declined to answer a question about whether the country is developing its first aircraft carrier.
The spending spree began in the late 1980s, when China embarked on an ambitious programme to upgrade its armed forces.
Since then it has bought and produced its own high-tech weapons, and reduced the number of personnel in an attempt to have fewer, but better trained, troops.
Salaries and other benefits for officers and ordinary soldiers have also been improved.
Previous large spending increases could explain the smaller increase this year.
"China has achieved its targets in the past by providing continuous double-digit budget increases," said Andrew Yang, an expert on China's military who is now Taiwan's deputy defence minister.
Many experts believe the actual amount spent by China on its armed forces is far higher than the published amount.
And Washington, among others, worries about what the country's ultimate goals may be.
In a recently published book, called The China Dream, a senior officer in China's People's Liberation Army said the country should aim to build a major military force that could challenge the US this century.
Other officers attending the Chinese People's Political Consultative Conference (CPPCC), an advisory body that holds a meeting at the same time as the parliamentary session, rejected that idea.
But the comments underscore the military tension that currently exists between China and, primarily, the United States.
That relationship was not improved when Washington announced earlier this year that it intended to go ahead with the sale of weapons worth $6.4bn to Taiwan, a self-governing island that China considers its own.