SINGAPORE, June 2 (Xinhua) -- China will in September finalize issues concerning a hotline with the United States for handling emergency, a senior Chinese military official told the Sixth Asia Security Summit here Saturday.

Zhang Qinsheng, deputy chief of General Staff of the People's Liberation Army of China, also the highest-ranking Chinese officer to have attended the three-day security summit, known as the Shangri-La Dialogue, made the remarks at the second plenary session titled "India and China: building international stability."

He said the technical issues had been settled and he would attend a meeting in Washington in September to "finalize" the agreement.

On China's defense budget for 2007 of 350.921 billion yuan (about 44.9 billion U.S. dollars), he said the figure is "true and authentic".

Then he elaborated on the issue in response to the audience's question, saying that China is a large country in terms of territorial size and population, so it needs a proportionate military capability.

He also said that in August 2.3 million army men will change their uniforms and that the spending will be a large part of the increased budget.

"China also has another problem, which is the Taiwan issue," he said, adding that "some people in Taiwan are still dreaming about secession. So Chinese military must be prepared to cope with this kind of threat. If anything happens, China's military must be prepared to respond."

He said that China's defense policy which is defensive in nature is prescribed politically by the peace and development model.

"it is armed to develop limited military power," he said, adding that "it is a peace policy."

The three-day Shangri-La Dialogue, organized by the London-based International Institute for Strategic Studies, opened on Friday. It gathered defense ministers and top officials from 26 countries and regions in the Asia-Pacific region and Europe to address major regional security issues and defense cooperation.

Military official: China's defense budget true and authentic

SINGAPORE, June 2 (Xinhua) -- A senior Chinese military official told the sixth Asia Security Summit here Saturday that China's defense budget is true and authentic.

Zhang Qinsheng, Deputy Chief of General Staff of People's Liberation Army of China, made the remarks while speaking at the plenary session of the three-day security summit, also known as the Shangri-La Dialogue, after the name of the Singapore hotel at which the event has been held since its launch in 2002. Full story