BEIJING - CHINA said Tuesday its overall security situation improved over the past year, although it remained alert to separatism in Tibet and Xinjiang and firmly opposed to US arms sales to Taiwan.

In a military policy paper issued by the State Council, or Cabinet, China also said it considered the global economic crisis a threat to development and was concerned about possible competition among nations for energy and food.

The paper, which covered 2008, did not give any new spending figures for China's 2.3 million-strong armed forces for 2009. China had announced a military budget of US$59 billion (S$88 billion) for 2008, up nearly 18 per cent over the previous year.

Such lavish funding has allowed China to add cutting-edge fighter jets, missiles, submarines and surface ships, and the report said such efforts would continue.

But it did not mention an aircraft carrier, the object of frequent speculation by observers of the Chinese military.

A Defence Ministry spokesman last month said China would 'seriously consider' building a carrier, while the recent deployment of a three-ship Chinese flotilla to fight piracy off Somalia has further bolstered those prophesying a major expansion of Chinese naval power.

Strategically, a carrier is seen as a deterrent to US intervention in a conflict over Taiwan, although Chinese experts say it would mainly serve to police the 3 million sq km of sea claimed by Beijing as its maritime territory.

Blocking formal independence for self-governing Taiwan remained the military's chief concern, the report said, although it added that 'separatist forces for ... 'de jure Taiwan independence' have been thwarted,' and that the situation across the Taiwan Strait had become more stable.

The report did not say how separatists' efforts had been mitigated.

Years of tension between the sides gave way to rapprochement following last year's election of Taiwanese President Ma Ying-jeou, who favors a less confrontational approach to China.

Arms sales, however, remain a bone of contention.

In October, China's defence minister demanded that the US cancel a US$6.5 billion arms sale to Taiwan, including Patriot III missiles and Apache helicopters, and suspended some senior-level visits and other planned exchanges in retaliation.

Defence sales to and relations with Taiwan have been an issue for every US president since Beijing and Washington established diplomatic ties 30 years ago.

The report also said China faced long-term security threats in Tibet, hit by anti-government riots last March, and the far-west region of Xinjiang, where a series of bombings and attacks struck just before the start of the August Beijing Olympics.

The report pointed to concerns about world economic development, saying 'issues such as energy and food are becoming more serious, highlighting deep-seated contradictions.' Overall, however, the report said China's military enjoyed a successful year by continuing to modernise, while living standards in the country improved and society remained stable.

'China's national strength has increased substantially... and the capability for upholding national security has been further enhanced,' the report said. -- AP