BEIJING China's new national security commission will enable the government to speak with a single voice when it comes to dealing with crises at home and abroad, state media cited President Xi Jinping as saying.
Details of how the commission would operate had been left unclear when it was announced in a government communique on Tuesday after a four-day conclave to map out reforms, and China had hinted it would have a domestic focus.
On Friday, Xi said it would deal with both domestic and international security challenges.
"Currently, our country faces external pressures on safeguarding sovereignty, security and development interests, and internal pressure on safeguarding political security and social stability," Xi said in comments carried by the official Xinhua news agency.
The "predictable and unpredictable" risks facing China are increasing dramatically and the country's existing systems are incapable of handling them, Xi said.
"Establishing the national security commission strengthens the concentration and unified leadership of our national security operations and is a top priority," he added.
Experts say the commission is based on the National Security Council in the United States and would increase coordination among the various wings of China's security bureaucracy, split now among the police, military, intelligence and diplomatic services.
Possible international flashpoints for China include North Korea and the South China Sea.
China says it also faces considerable threats at home, pointing to continued unrest in two regions heavily populated by ethnic minorities which chafe at Chinese rule - Tibet and Xinjiang.
As part of the same reform package, Xinhua said, China will "optimise the size and structure of the army ... and reduce non-combat institutions and personnel" as well as "accelerate the building of new combat powers".
In recent years, China has embarked on a major modernisation of its armed forces, the world's largest. It has involved developing new weapons including an aircraft carrier and testing emerging stealth jet technology, which have spooked the region.
Xinhua said privately owned companies would be allowed to "join" the defence industry, and the way the country develops and buys weapons would be reformed.
It added that the way the military is led would also be reformed by "optimising" the role of the powerful Central Military Commission, which Xi heads.
Xinhua gave no details for how any of the measures would be implemented.
Spending on the People's Liberation Army will rise 10.7 percent to 740.6 billion yuan this year, a number many governments and analysts say is not representative of the country's true defence outlays.
China says its defence spending is purely for defensive needs and to update outdated equipment, pointing out that its spending is just a fraction of that of the United States. (Reporting by Michael Martina; Additional reporting by Ben Blanchard; Editing by Neil Fullick and Mohammad Zargham)