China says it will increase its defense budget 7.2% this year as it continues its campaign to build a larger, more modern military to assert its territorial claims and challenge the U.S. defense lead

China increases its defence spending by 7.2% - the third year in a row - as it says more is needed to deter the United States.

China plans to spend 7.2% more on its military this year, according to the draft budget presented at the National People's Congress on Wednesday, with Beijing also announcing that the year's economic growth target will again be 5%.

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On Wednesday, 10-year German bonds saw the worst day since March 1990 — just months after the fall of the Berlin Wall.

Germany is in for a massive ramp-up in spending under an agreement by the parties hoping to form its next government, with a 500 billion euro special fund sought for infrastructure and plans to unshackle defence investment from its debt rules.