North Korea is likely to launch a provocative attack on South Korea this year, a top analyst said Thursday at the launch of his think tank's annual report on the world's military capabilities.

The International Institute for Strategic Studies said North Korea's "military first" doctrine remained clearly intact under youthful leader Kim Jong-Un.

Mark Fitzpatrick, director of the London-based IISS's non-proliferation and disarmament programme, said world powers were increasingly concerned about the threat emanating from Pyongyang.

"North Korea presents a significant threat because it has ballistic missiles that can hit Japan and all of Korea," he told AFP.

"It has nuclear devices that it may or may not be able to put on the warheads of those missiles.

"It combines that with a rhetoric that has exceeded all dimensions and a propensity to fire first."

While firing first in the next few weeks would be "dangerous" due to the ongoing US-South Korea joint military exercises, "over the course of the year, most analysts do think that North Korea will follow through with some sort of provocation," said Fitzpatrick.

He said the risk of escalation from there was "serious" because South Korea feels the need to establish deterrence credibility.

The next time North Korea attacks, "it's pretty clear that South Korea is going to respond... and where it goes from there is anyone's guess."

However, North Korea would probably not want to trigger a fully-fledged war because it would inevitably mean the end of their regime due to the huge advantage held by South Korea and the United States.

North Korea confirmed Wednesday that it had shredded the 60-year-old armistice ending the Korean War, and warned that the next step was an act of "merciless" military retaliation against its enemies.

Military tensions on the Korean peninsula are at their highest level for years.

Meanwhile China is "very nervous and angry" at Pyongyang and its support for its neighbour has diminished in the past year, Fitzpatrick said.

While Beijing wants to maintain a buffer state, he doubted that they would side militarily with them in a conflict.

"They would try to do everything they can to avoid it coming to such circumstances," he said.

"There's realisation that the Korean peninsula is probably the place in the world that is most likely to erupt into a full-scale conflict that could involve nuclear weapons.

"North Korea's nuclear tests really do up the ante on the tinderbox situation."

The IISS's annual "Military Balance" report said North Korea had continued its efforts to develop its nuclear weapons capability and its closely-related long-range missile arsenal in 2012.

Last year saw nominal Asian defence spending overtake that of European NATO states for the first time.

China now spends more on defence than neighbouring Japan, South Korea and Taiwan combined, the report said.

If the 15 percent average annual increases in China's official defence spending seen over the past decade continue, Chinese defence outlays could rival US base defence budget spending by 2025 at the latest.

Meanwhile the IISS considers the risk of a conflict between China and Japan over disputed islands in the East China Sea as very unlikely, though the spat will lead to direct military competition between the two states and cause destabilisation within the region.