THIMPHU, Bhutan (AFP) - The tiny Himalayan kingdom of Bhutan on Friday celebrated the birthday of its revered "Dragon King" in a swirl of colourful dances and traditional music.

As Jigme Khesar Namgyel Wangchuck turned 34, his subjects - who number fewer than 750,000 - observed a national holiday in the mountainous kingdom, nestled between India and China.

In the capital Thimphu, hundreds of well-wishers danced and sang in honour of the Oxford-educated monarch, watched by thousands of spectators in the national dress, which is still required to be worn in schools and the workplace.

"We love our king because he is close to the people and he makes no distinction between his subjects, whether they are rich or poor," said Mr Bishnu Chhetri, a 37-year-old trader in Thimphu.

A military parade and a speech by Prime Minister Tshering Tobgay also marked the event, which the monarch himself did not attend.

The fifth Dragon King, whose picture is commonplace in homes across the country, came to the throne in 2006 after his father abdicated and agreed to cede absolute power to a parliamentary democracy.

Bhutan held its first elections in 2008 and is known for pursuing a unique economic development model of "Gross National Happiness", which aims to balance spiritual and material wealth.