By Yimou Lee and Ben Blanchard
TAIPEI (Reuters) - Taiwan unveiled a T$42.1 billion ($1.4 billion) increase for next year's planned defence spending on Thursday, as China announced details of its latest combat drills near the democratic island.
China has stepped up its military activity near Taiwan, which it regards as a breakaway province.
On Monday, Taiwan said Chinese fighters briefly crossed the sensitive median line of the Taiwan Strait, the same day U.S. health chief Alex Azar met President Tsai Ing-wen in Taipei. China had denounced Azar's trip.
Tsai's Cabinet is proposing T$453.4 billion in military spending for the year starting in January, versus T$411.3 billion budgeted for this year, up 10.2% according to Reuters calculations.
"The steady increase in the defence budget will facilitate the implementation of various military-building and war-preparation tasks ... and ensure national security and regional peace and stability," Taiwan's Defence Ministry said.
About three hours after the budget announcement, China's People's Liberation Army's Eastern Theatre Command said its forces had in recent days carried out combat drills in the Taiwan Strait and to the north and south of the island, implying they were aimed at Azar's trip.
"Recently, a certain large country has continued to make negative moves on Taiwan-related issues, sending serious wrong signals to 'Taiwan independence' forces, and seriously threatening the peace and stability of the Taiwan Strait," it said.
"The theatre command's organising of patrols and exercises are necessary actions taken in response to the current security situation across the Taiwan Strait and to safeguard national sovereignty," the statement added.
Taiwan's Defence Ministry said the situation was normal and people should not worry.
Tsai has made modernising Taiwan's armed forces and increasing defence spending a priority.
The budget must be approved by lawmakers, though Tsai's Democratic Progressive Party has a large majority in the legislature, making it unlikely to be blocked.
China has never renounced the use of force to bring Taiwan under its control, and has denounced the United States for arms sales to the island. Washington is bound by law to provide Taiwan with the means to defend itself.
Taiwan is in discussions with the United States to acquire sea mines to deter amphibious landings, as well as cruise missiles for coastal defence, Taiwan's de facto ambassador to United States said on Wednesday.
Last year, the U.S. State Department approved arms sales worth US$10 billion for Taiwan.
Taiwan's military is well-armed, but dwarfed by that of China.
"Taiwan authorities are spending their taxpayers' money on defence, but no matter how much they spend on defence, Taiwan is still a small place. Confronting the mainland is like an ant trying to shake a tree," Chinese Foreign Ministry spokesman Zhao Lijian told reporters in Beijing.
($1 = 29.3990 Taiwan dollars)
(Reporting by Yimou Lee and Ben Blanchard; Additional reporting by Cate Cadell and Yew Lun Tian in Beijing; Editing by Himani Sarkar, Gerry Doyle and Alex Richardson)