05 March 2014

Full Steam Ahead: China’s Ever-Increasing Military Budget

Andrew S. Erickson and Adam P. Liff, Full Steam Ahead: China’s Ever-Increasing Military Budget,” China Real Time Report (中国实时报), Wall Street Journal, 5 March 2014.

China’s official defense budget is projected to increase 12.2% in 2014 to roughly 808 billion yuan ($132 Billion), while the country’s economic growth is expected to hold steady at 7.5%, according to the annual budget report released Tuesday in Beijing. This year’s projected growth in the People’s Liberation Army budget is higher than last year’s defense spending increase of 10.7%, and marks the third year in a row that official military spending is projected to outpace GDP growth.

Rear Admiral Yin Zhuo, director of the Chinese navy’s Expert Consultation Committee, was paraphrased by the official Xinhua news agency on Wednesday citing “increasingly severe security challenges” as a reason for these increases.

While increases to China’s defense spending are nothing new, they are coming at a time when China’s leaders increasingly struggle to meet (declining) annual GDP growth targets.  Gone are the heady days of double-digit GDP growth. Yet leaders in Beijing continue to harbor ambitions to build military power “commensurate with China’s international standing.” With the world’s second largest economy, it’s not surprising that China can afford the world’s second-largest defense budget. Less certain is how great this divergence will become, and how long it can continue.

Relevant readings and media:

Andrew S. Erickson, “Testimony before the U.S.-China Economic and Security Review Commission,” Panel II: “Inputs to China’s Military Modernization,” “China’s Military Modernization and its Implications for the United States” hearing, Washington, DC, 30 January 2014.

Andrew S. Erickson, “China’s Near-Seas Challenges,” The National Interest 129 (January-February 2014): 60-66.

Andrew S. Erickson, “China’s Naval Modernization: Implications and Recommendations,” Testimony before the House Armed Services CommitteeSeapower and Projection Forces Subcommittee, “U.S. Asia-Pacific Strategic Considerations Related to PLA Naval Forces” hearing, Washington, DC, 11 December 2013. Click here for oral statement.

Adam P. Liff and Andrew S. Erickson, “Demystifying China’s Defence Spending: Less Mysterious in the Aggregate,”The China Quarterly 216 (December 2013): 805-30.

Nathaniel Austin, “Lifting the Shroud on China’s Defense Spending: Trends, Drivers, and Implications—An Interview with Andrew S. Erickson and Adam P. Liff,” Policy Q&A, National Bureau of Asian Research, 16 May 2013.

Andrew S. Erickson, “China’s Defense Budget: A Richer Nation Builds a Stronger Army,” Inaugural Presentation in “China Reality Check” Speaker Series, Center for Strategic and International Studies (CSIS), Washington, DC, 8 April 2012.

Andrew S. Erickson and Adam P. Liff, “China’s Military Development, Beyond the Numbers,” The Diplomat, 12 March 2013.

Andrew S. Erickson and Adam P. Liff, “A Player, but No Superpower,” Foreign Policy, 7 March 2013.
Andrew S. Erickson, “China’s Military Budget Bump: What it Means,” China Real Time Report (中国实时报), Wall Street Journal, 5 March 2013.