I don't belief by ratcheting up defence spending will achieve anything since China can't freely print money the rest of the world gladly laps up.
While increasing defence spending by 10% instead of ~7% would certainly have material implications for the PLA and thereby Chinese national security, the greatest value would lie in the symbolism.
Breaking the pattern of linking defence spending growth to broader economic performance would send a signal to Washington (and other nations) that China recognises the inflammatory rhetoric and actions of the new US President, and asserts that China will not be intimidated but will respond in a measured fashion to ensure the nation's security.
The other benefit of such a response is that it is modest enough that it could not be accused of being escalatory in and of itself. It does not increase the risk of confrontation, and it also implicitly suggests that the increase could be reverted if the US administration adopts a more measured and less confrontational tone. It therefore leaves the ball in Washington's court.
Such a measure:
(1) protects China's interests
(2) asserts that China will not be intimidated
(3) whilst not being escalatory
(4) and allowing for further changes (increase or decrease) in response to future American actions and rhetoric.