S. NORTH'S KOREA TO UP DEFENCE BUDGET; U.S. WARNS ON KIM

SEOUL (Reuters) - South Korea plans to sharply increase spending on defence next year, local media reported, as regional tensions mount following a North Korean artillery attack and differences between China and the United States.

The Korea Economic Daily said the government had proposed a 5.8 per cent increase in the 2011 defence budget to about $27 billion to buy more self-propelled artillery and fighter-bombers, far more than the 3.6 per cent rise this year.It said parliament could approve an even higher amount, given this week’s shelling by North Korean forces of a Southern island near the disputed maritime boundary.
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