China, facing what it sees as increasing military pressure from the United States, is likely to shrug off the pall hanging over its economy from the novel coronavirus and increase its defence budget again this year, Reuters reported.

China's military spending, due to be announced at the opening of the annual meeting of parliament on Friday, is closely watched as a barometre of how aggressively it will beef up its military capabilities.

Its economy shrank 6.8 per cent in the first quarter of 2020 from a year earlier, as the novel coronavirus spread from the central city of Wuhan where it emerged late last year, and the government has said economic conditions remain challenging.