CHINA and the US agreed on measures yesterday to boost defence co-operation, including setting up a hotline, but clear differences remained over Beijing’s military build-up.

China announced today an 11.6% increase in military spending for 2004, a bigger increase than last year in an age when the People’s Liberation Army is racing to make itself competitive and adapt to a hi-tech world.

China’s first astronaut in space returned safely to Earth today when his craft touched down as planned after 21 hours in orbit. Beijing’s mission control declared the country’s landmark debut flight “a success”.