China increased its defense budget in 2010 by 7.5 percent to US$78 billion, while most other countries were cutting military spending, according to the latest report on China's military strength. The annual report, submitted Tuesday by Taiwan's Ministry of National Defense (MND) to the Legislative Yuan, said China did not follow the general trend of reduced defense budgets in the wake of the global financial crisis. Meanwhile, Taiwan was among the countries that cut defense spending, the report said. Taiwan's 2011 defense budget proposal of NT$297.2 billion (US$9.27 billion) is NT$200 million less than the previous year and accounts for 16.6 percent of the country's entire budget, the report said. However, the MND has allocated NT$77.6 billion for the construction of living quarters for military personnel and their families, which brings the ministry's full budget to NT$374.8 billion or 2.73 percent of the country's gross domestic product. President Ma Ying-jeou promised during his presidential election campaign to raise the defense budget to 3 percent of GDP, which is the level it was at before the Democratic Progressive Party came to power in 2000. The MND report warned that Beijing has launched a 'charming offensive' against Taiwan and is only being accommodating on issues that do not undermine its claim to Taiwan. Beijing has never let up in its efforts to block the U.S.' sale of arms to Taiwan and would go to great lengths to strengthen its ability to invade Taiwan, despite warming ties across the Taiwan Strait, the report said. If Taiwan pushes for permanent independence from China, acquires weapons of mass destruction, or erupts into civil chaos, China could decide to attack, according to the report. 