UPDATE 2-Taiwan to raise defence spending as China details combat drills

(Recasts, adds details, byline)

By Yimou Lee and Ben Blanchard

TAIPEI, Aug 13 (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. 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.

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.

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, including 106 M1A2 Abrams tanks and 66 F-16V fighter jets.

Taiwan's military is well armed, but dwarfed by that of China's, which is adding advanced equipment like stealthy fighter jets and aircraft carriers. ($1 = 29.3990 Taiwan dollars) (Reporting by Yimou Lee and Ben Blanchard; Additional reporting by Beijing newsroom; Editing by Himani Sarkar and Gerry Doyle)