A senior executive of China North Industries Group Corporation (Norinco), the country's largest defense equipment manufacturer, said China's boost in military spending "does not need excessive interpretation" as the sum still falls short of Western countries.

Yin Jiaxu, Norinco's vice president and a Chongqing Municipality delegate to the 11th National People's Congress, said on Tuesday in Beijing that Norinco will continue to push forward the modernization of China's defense system, as per instructed in Premier Wen Jiabao's 2012 government work report delivered Monday.

In the report, Wen called for further military modernization and the access to first-class weaponry essential for the People's Liberation Army's (PLA) capabilities.

"National defense is the backbone of a country's integrity," said Yin. He said Norinco has always maintained the commitment of supporting China's defense industry and efforts to safeguard the country.

However, Yin said the spending increase will "first of all raise servicemen's living standards" and "making necessary supplement to the military's combat capabilities." He said China's military power still lags behind that of some Western countries.

In 2011, China's military expenditures represented 1.3 percent of the country's GDP, compared to over 2 percent for both the U.S. and the U.K.

"Norinco's business revenue reached 300 billion yuan (US$47.54 billion) in 2011, and we expect the figure to rise to 500 billion (US$79.23 billion) during the 12th Five-Year Plan (2011-15)," said Yin, referencing expansions to the country's emphasis on national defense.

China plans to increase its defense budget to 670 billion yuan (US$106.4 billion) in 2012, an 11.5 percent rise year-on-year.

The increased budget will also help to upgrade China's weapon system so as to "cope with information warfare and potential future regional warfare," said Yin, adding that designing and manufacturing sophisticated weapons is a top priority task for China as well as Norinco.

He said because China has vast territories, and maintaining an effective defensive force is essential to "safeguard China's economy." Despite the rate of increase in its military spending in double digits, Yin said the base number is still small, so the "increase wasn't substantial, and doesn't need excessive interpretation."

In addition to military equipments, Norinco also produces products for civilians. As is with most weapons manufacturers, peacetime overcapacity one of Norinco's major concerns.

"The peaceful use of military technology has been one of Norinco's major dedications," Yin said. "Especially during peacetime," because despite its unique, ordnance manufacturer isn't exempted of market competition.

Contrary to popular belief, ordnance makers in China still must bid for government contracts, said Yin. He explained that China does not publish information in this regard due to confidentiality implications. "But companies need to obtain system certification before they can join the biddings. It's similar to the U.S. practices."

The bidding system will only help ensure technology advancement, said Yin, who has noted in certain fields, China's military technology is "neck to neck" with the world's best.

Nevertheless, Yin said China's advancements in its military spending and technologies are for defensive purposes, and not to participate in any kind of "arms race."

"The Central Military Commission and the State Council have both forbidden any of weapons makers from joining any arm race; the former Soviet Union was an example [of the consequences]."

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