TAIPEI, Taiwan -- China said Wednesday it will increase its defense budget 7.2% this year.

The budget was announced at the National People's Congress, the annual meeting of China's legislature. The Pentagon and many experts say China's total defense spending may be 40% higher or more because of items included under other budgets.

The increase is the same percentage as last year, far below the double-digit percentage figures of previous years and reflecting an overall slowdown in the economy. The nation's leaders have set a target of around 5% growth for this year.

Nevertheless, China's military spending remains the second largest behind the U.S. and it already has the world's largest navy.

Tensions with the U.S., Taiwan, Japan and neighbors who share claims to the crucial South China Sea are seen as furthering growth in increasingly high-tech military technologies from stealth fighters to aircraft carriers and nuclear weapons.