China’s military budget rise: the controversy

6 Mar

Last Sunday  Li Zhaoxing, spokesman for the annual session of China’s national legislature, unveiled the new China’s military figures for 2012: its defense budget will increase by 11.2 percent to 670 billion yuan (106.4 billion U.S. dollars) this year. The draft defense budget is 67.6 billion yuan more than the defense expenditure of 2011. As it is being usual in the last few years the number of the the world’s second highest military budget in the world, after the U.S., provokes some confrontation between the Western countries and China.

Defense spending has more than doubled since 2006, tracking a rise in nominal gross domestic product from 20.9 trillion yuan to 47.2 trillion yuan in that time. It is expected to double again by 2015, making it more than the rest of the Asia Pacific region’s combined, according to a report from IHS Jane’s, a global think tank specializing in security issues. According to the report, Beijing’s military spending will reach $238.2 billion in 2015, compared with $232.5 billion for rest of the region.

Arguments in favor of China’s military budget rise

According to economic development: China’s main argument in favor of such a increase in defense budget is that the Chinese government follows the principle of coordinating defense development with economic development. It sets the country’s defense spending according to the requirements of national defense and the level of economic development. According to Li, “The Chinese government follows the principle of coordinating defense development with economic development. It sets the country’s defense spending according to the requirements of national defense and the level of economic development”.

Low proportion relative to GDP: According to China’s government  the share of defense spending in China’s GDP dropped from 1.33 percent in 2008 to 1.28 percent in 2011, and that in China’s fiscal expenditure dropped from 6.68 percent in 2008 to 5.53 percent in 2011, since China’s gross domestic product (GDP) and national fiscal expenditure showed year-on-year growth of 14.5 percent and 20.3 percent, respectively, but the country’s defense expenditure only grew by 13 percent, according to Li.

Intended to modernize the army: The increase in its military spending is intended to meet the necessary demands for military modernization. China’s military spending mainly comprises the living expenditures of servicepeople, expenses for training and maintenance, and spending on equipment, Li said at the press conference. The costs for research, experimentation, procurement, repair, transport and storage of all weapons and equipment, including new types of weapons, are included in the defense budget that is published every year, the spokesman said.

To improve army’s conditions: “Chinese people can share the fruit of economic development and its 2.3 millions soldiers should be no exception. The defense budget should cover expenses such as pay increases and training and the army would benefit from a fast-developing social security system.”, mentions Li Hong, secretary-general of the China Arms Control and Disarmament Association, writes in China Daily.

People’s Liberation Army officers earn at least 5,400 yuan ($845) per month on average, a very competitive wage compared to Chinese state owned enterprise employees’ average monthly earnings of closer to US$626 (4,000 RMB).

Not interested in arms race: China will not develop its military strength beyond national security demands and economic capability, and will not conduct an arms race with any country, according to Chinese analysts. “China will not engage in an arms race with other countries”, Defense Ministry spokesman Geng Yansheng said last February 24th, stressing that China’s military growth is for defensive purposes.

Peaceful rise of China: According to the Chinese official, China is committed to the path of peaceful development and follows a national defense policy that is defensive in nature. The limited military strength of China is solely for safeguarding its national sovereignty and territorial integrity, and will not pose a threat to any country, said Li.

Arguments against China’s military budget rise

The actual figures are higher: According to foreign analysts the actual spending on China’s military activities is greater than the publicly disclosed budgets and analysts can only estimate the total costs. Phillip Saunders, director of the Center for the Study of Chinese Military Affairs at National Defense University in Washington, estimates China’s true defense spending is 50 percent higher than the official budget because items such as research and development as well as foreign weapons procurement are not included. Vital elements of the Chinese military buildup, including cyberwarfare, space capabilities and foreign procurements, were not included in the announced budget,  analysts say.

Lack of transparency:  Acting Australia Foreign Minister Craig Emerson yesterday emphasised the need for China to be upfront about its military spending. “We seek transparency in the Chinese defence budget”. Another neighbor, Japan, is “closely watching” China’s military spending and is seeking greater transparency in its outlays, Chief Cabinet Secretary Osamu Fujimura told reportered yesterday in Tokyo.

To increase military presence: China is further strengthening its capabilities in response to U.S. plans to increase its military presence in the Pacific and is followed by China’s neighbors as an indicator of China’s growing capability to project force beyond its borders. China claims indisputable sovereignty over the islands, reefs and shoals of the South China Sea and their surrounding waters, demarcating a tongue-shaped claim on Chinese maps extending hundreds of miles from mainland China.

To scare neighbors: China is “always ready” to use force if necessary to ensure its territorial integrity in the South China Sea, Maj. Gen. Luo Yan, deputy secretary general of the Chinese Academy of Military Science, said yestrday. China’s military should be “strong and big,” and the country should do more to mark its rightful claim to the area, he told reporters in Beijing.

To confront territorial disputes: China also has contests control over the Senkaku, or Diaoyu islands with Japan, which sparked a diplomatic standoff in 2010 after Japan detained a Chinese fishing boat captain when his vessel collided with a Japanese patrol boat. Vietnam recently filed a protest saying China assaulted its fishermen and prevented them from entering the Paracel Islands. China responded by claiming sovereignty over the islands and said it didn’t board the vessels.

To protect economic interests: China has economic interests around the world, including 812,000 workers abroad at the end of 2011, mean China’s military may increasingly deploy across the globe. China set a frigate to Libya last year to help evacuate thousands of Chinese nationals during the revolt that saw the overthrow of Muammar Qaddafi.

Military race: IHS Jane’s report predicts a military budget increase by an average of 18.75 percent annually until 2015. “China’s investment will race ahead at an eye watering 18.75 percent, leaving Japan and India far behind,” said Paul Burton, senior principal analyst of IHS Jane’s Defence Budgets.

For further information:

Pentagon’s 2011 report to Congress on the Chinese military

China Military and Armed Forces (People’s Liberation Army, PLA)

China’s Defense Spending Dilemma

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