Beijing ? China unveiled budget plans Thursday that increase military spending nearly 10 percent, raise spending on poverty and rural development and promise to keep the deficit “bearable.”

China’s budget was presented on the second day of the National People’s Congress, which will also announce the next group of national leaders during the session.

The military budget, which was increased 9.6 percent to $22.4 billion, was drawn up “with a view to adapting to changes in the international situation, safeguarding national security and sovereignty and territorial integrity and raising the combat effectiveness of the armed forces in fighting wars to defend the country with the use of high technology,” said Finance Minister Xiang Huaicheng.

The government’s top planner also said today that China’s total trade is expected to rise 7 percent in 2003, a significant decrease from last year for a country eager to show its economic reforms are paying off.

China has raised its military budget consistently — in double digits for the past 13 years. This announced budget barely misses the double-digit marker and is significantly smaller than last year’s increase, though actual spending for the entire People’s Liberation Army is believed to be much more.

On the first day of legislative business Wednesday, officials identified poverty as the top concern facing the incoming leadership lineup.

Premier Zhu Rongji, who is set to retire at the 14-day meeting, prominently mentioned the “slow growth in farmers’ incomes and some urban residents” on Wednesday as well as the “rise in the unemployed.” He also cautioned about environmental problems, government waste and corruption.

“We should continue to take developing agriculture and the rural economy and increasing farmers’ income as the top priority of our economic work,” Zhu said.

Keeping order and maintaining stability was another important theme of this year’s congress, which is expected to mark the first orderly transfer of power in China’s communist history.

Chinese Premier Zhu Rongji acknowledges the applause of delegates after delivering his final work report during the opening session of the National People's Congress in Beijing's Great Hall of the People. The congress is meeting this week and next to turn power over to a younger generation.

Zhu, 75, will likely hand over his job to Wen Jiabao, a geologist with expertise in rural affairs. President Jiang Zemin, 76, is almost certain to be succeeded by 60-year-old Hu Jintao, who took over as Communist Party general secretary in November.

Jiang is retaining a key military post, and many expect he will continue to play a powerful role.

The generational shift has been in the making for nearly a decade, and the mostly ceremonial national legislature will likely rubber-stamp the party’s choices for new leaders.

“They are more cultured, more knowledgeable, they know more about the world, they have more political experience and they are younger,” said Shanghai delegation member Chen Chuanwei, sipping tea outside the auditorium.

“They are,” he said, “very appropriate to bring us into the new century.”

In recent years, China has increasingly been viewed as a shiny new economy that, by embracing the market, has shrugged off the dusty old days of communism. Zhu’s generation of leaders focused on creating an export-driven industry that brought in hundreds of billions of dollars in investment.