Mr Liu defended China's military policy at a briefing yesterday, saying Beijing had the right to increase spending.
He also denied accusations made in a report by the London-based International Institute for Strategic Studies, which said China's military spending was 1.7 times higher than officially stated.
By Shi Jiangtao in Beijing
Focus will shift to developing advanced weapons and dual-purpose technology
China has announced a plan to modernise the military over the next 15 years through developing national capabilities in building large aircraft, advanced weaponry, nuclear power stations and space probes, Xinhua reported yesterday.
The announcement of the plan came amid reports of China's strong disapproval of reports by the US Defence Department and a British research institute, which raised concerns over China's military build-up.
Xinhua also mentioned research labs and recruiting "a team of world-class experts", but did not provide further details.
Under the plan, Beijing will focus on developing technology that can be used in both the military and commercial arenas, according to the blueprint adopted yesterday by Commission of Science, Technology and Industry for National Defence at a meeting in Qingdao, Shandong .
The plan called for efforts to develop computer technology, large aircraft, pressurised-water reactors and high-temperature gas-cooled nuclear power stations, manned space missions and lunar probe programmes.
Highlighting the importance of developing dual-use technology, Premier Wen Jiabao urged scientists to make the manufacturing of large aircraft a national strategy.
"The listing of large aircraft as part of the national strategy does not simply mean its production, but making it a competitive industry," he was quoted by the China News Service as saying.
Mr Wen said China needed 1,500 large aircraft, worth more than US$100 billion, in the coming decades. However, the task could take decades to fulfil as China was at least 30 to 40 years behind the industry's world leaders, he said.
Meanwhile, China yesterday strongly protested over the Pentagon's annual report which, once again, raised alarms over Beijing's soaring military budget and modernisation.
Beijing denounced Washington's criticism, saying it came from a "cold war mentality".
"Based on a 'cold war mentality' and ulterior motives, the report deliberately overstates China's military strength and expenditure, and continues to spread the 'China threat theory'," said Foreign Ministry spokesman Liu Jianchao .
China's annual defence budget for this year has been set at 283.8 billion yuan, up 14.5 per cent compared with last year, although western analysts have said actual military spending is higher.
Mr Liu defended China's military policy at a briefing yesterday, saying Beijing had the right to increase spending.
He also denied accusations made in a report by the London-based International Institute for Strategic Studies, which said China's military spending was 1.7 times higher than officially stated.
