Lost in the headlines trumpeting the lowest annual increase in its defense budget for seven years is China's resolute announcement it will continue building manmade islands in the South China Sea in defiance of international law, and despite an international court in 2016 declaring illegal China's claim to own most of the South China Sea.

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While the year-on-year rise in China's defense budget has tapered, the actual amount China has set aside for defense this year will be the highest in its history: 1.044 trillion yuan ($151 billion), the first time the defense outlay has topped one trillion yuan, said the Ministry of Finance.

The announcement China's defense budget for 2017 will only be seven percent larger than 2016 was made March 4 by Fu Ying, a spokeswoman for the National People's Congress. China claims this seven percent rise is the smallest percentage annual growth rate in defense spending this century.

Fu, however, didn't reveal the exact amount set aside for defense spending in a widely covered press event in Beijing.

That task was left to the Ministry of Finance, which on March 5 issued a statement revealing the true figure as 1.044 trillion yuan ($151 billion), the highest in China's history.

Oddly, this amount is nowhere to be found in the government's budget report but was revealed to the 3,000 delegates attending the ongoing National People's Congress in Beijing. The ministry had no explanation for this unusual discrepancy.

The smoke and mirrors game China played to deceive international media is a ploy meant to illustrate the stark difference between "peaceful" China, which is allegedly slowing down defense spending, and the "bullying" United States, whose president wants a 10% boost to its defense budget.

And in announcing this year-on-year drop, Fu also said China will keep building its manmade islands. She noted the U.S. "probably still worries China's capabilities might catch up to or exceed its own."

She said China as a developing country still has a great gap with the U.S. in its military capabilities "but China's military's development and construction is to continue."

"This is a requirement for the defense of our national sovereignty and security."

Fu also said China had no intention of being drawn into an arms race with the U.S., probably mindful that it was an ill-advised attempt to match massive U.S. defense spending that helped lead to the downfall of the communist Union of Soviet Socialist Republics in 1991.

Tagschina, military budget, Fu Ying, Ministry of Finance, manmade islands, South China Sea