China has announced a 7.2% increase in its defence budget for 2021, taking the total to £185 billion, while simultaneously warning of "escalating" threats.
During the National People's Congress, Beijing also outlined its 5% growth target for 2023, after the pandemic had hit the economy last year.
Outgoing Premier Li Keqiang delivered the annual work report and his replacement, Li Qiang, is expected to become the next premier.
President Xi Jinping, set for his third term, will oversee the "Two Sessions" meeting.
China's military spending is still dwarfed by that of the United States, though some analysts believe China downplays how much it spends on defence.
Mr Li urged the government to "comprehensively strengthen training in preparation of a war", which was seen as a suggestion to focus more on training under combat conditions and boosting combat preparedness.
Meanwhile, Beijing routinely says that critics want to demonise China as a threat to world peace.
Mr Li also warned that "external attempts to suppress and contain China are escalating".
These developments come alongside China's reshaping of several key Communist Party and state institutions.
President Xi Jinping is set to deepen his control of these institutions, deepening his control of China's government and economy.
In a significant move, the rubber-stamp parliament will confirm Mr Xi's third term as president, and the appointments of his top team.
During his speech, Mr Li urged China's armed forces to intensify military training and preparedness across the board and to develop new military strategic guidance.
Despite all these measures, Beijing insists that its military spending is low compared to its GDP, and is for defensive purposes only.