Japan has set aside US$48 billion for its yearly defense budget as it seeks to gain security against perceived threats ensuing from territorial disputes in the East China Sea, according to Tokyo's yearly white paper.

The budget, which grew 2.2 percent from last year, is the second increase in a row from the time Prime Minister Shinzo Abe took office in 2006.

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Japan has cited concerns over the security situation in the region, particularly after China established an air defense identification zone that includes the Japanese-administered Senkaku Islands (also known as Diaoyu in Chinese) which both countries claim.

The defense paper, which was approved by Abe's cabinet earlier this month, also noted North Korea's growing weapons program that could consequently lead to an "escalation of military provocations" in the region.

Last December, Japan approved a proposal to increase defense spending to 5 percent in the next five years. It is intended to upgrade the country's military capabilities by acquiring amphibious warfare equipment, helicopter carriers, anti-submarine patrol jets, surveillance drones and the U.S. F35 Joint Strike Fighter, CNN has learned.

China, which is estimated to have a military budget of about US$200 billion this year, rebuked the "groundless accusations." It claimed that Japan's accusation of China's aggression in the disputed waters is merely an excuse to justify its planned military expansion.

Beijing is reportedly the second highest country with the largest defense budget. While it purchases aircraft and other equipment from Russia, China is seeking to develop its own capabilities.

In 2012, it launched its first indigenous aircraft carrier and is expected to develop two more by the end of 2020. Development of a two-engine J20 - a fifth-generation stealth jet - is also underway and is likely to be released in 2018.

Some Japanese experts noted that the US$28 billion may be too small if Tokyo intends to take on a more assertive role. Nevertheless, Abe has decided to stick with the original five-year plan.

TagsSenkaku Islands, territorial disputes, maritime disputes, military expansion, indigenous weapons