04 March 2015

China to Boost Military Budget by 10.1%: Economic Slowdown Has Little Impact on Beijing’s Military Modernization Plans

WSJ’s China Real Time has kept up its tradition of scanning and uploading text-searchable versions of all three NPC opening-day reports — Li Keqiang’s work report, the budget and the NDRC’s development plan — in Chinese and English.

Jeremy Page, “China to Boost Military Budget by 10.1%: Economic Slowdown Has Little Impact on Beijing’s Military Modernization Plans,” Wall Street Journal, 4 March 2015.

BEIJING—China will raise military spending by 10.1% this year, suggesting that an economic slowdown will have limited impact on modernization plans that include new submarines, aircraft carriers and stealth fighter jets.

“As a large country, China needs the military strength to be able to protect its national security and people,” Fu Ying, a spokeswoman for the National People’s Congress, said Wednesday, ahead of Thursday’s opening of the Chinese legislature’s annual meeting. “Our history teaches us a lesson that when we lag behind, we come under attack. We won’t forget that.”

The high pace of military spending comes as gross domestic product growth fell to 7.4% last year—its slowest pace in almost a quarter of a century—and an expected level of about 7% this year. …

China 2015 Defense Budget to Grow 10.1 Pct, Lowest in 5 Years,” Xinhua, 5 March 2015.

BEIJING, March 5 (Xinhua) — China on Thursday announced a 10.1-percent rise in its national defense budget in 2015, the lowest growth in five years as the country confronts mounting pressure in the face of an economic slowdown.

According to a budget report released shortly before the country’s top legislature starts its annual session, the government plans to raise defense budget to 886.9 billion yuan (about 144.2 billion U.S. dollars).

That would make China the second largest military spender in the world following the U.S., whose defense budget amounted to 600.4 billion U.S. dollars in 2013.

Nonetheless, the 10.1-percent rise represented the lowest expansion in China since 2010, when the defense budget was set to grow by 7.5 percent.

The figure has thereon been riding on a multi-year run of double-digit increases, expanding 12.2 percent last year.

Thursday’s budget report did not explain the rationale behind this year’s abated growth, but a government work report to be presented by Chinese Premier Li Keqiang may offer some clues.

According to the report, national defense development would be coordinated with the country’s economic growth.

The Chinese economy grew 7.4 percent in 2014, registering the weakest annual expansion in more than two decades. The government set this year’s growth target to approximately 7 percent, brewing new concerns that the world’s economic powerhouse is losing steam.

But the report played down such concerns, stressing that China is now in a “new normal” state, where a balance ought to be stricken between growth and structural optimization.

It said China will comprehensively strengthen modern logistics, step up national defense research and development of new- and high-technology weapons and equipment, and develop defense-related science and technology industries.

“Building a solid national defense and strong armed forces is fundamental to safeguarding China’s sovereignty, security, and developmental interests,” the report said.

China’s military spending has long been at the center of Western scrutiny, drawing ire almost every year. Defense budgets grew 12.7 percent in 2011, 11.2 percent in 2012, and 10.7 percent in 2013.

But some experts believe the expenditure is still far from the level it needs to be in the face of increasingly severe security challenges.

Describing the 2015 defense budget increase as “moderate and reasonable,” Chen Zhou, a researcher with the Academy of Military Sciences, said the rise was in line with China’s national defense needs and its commitment to peaceful development.

“The army is in the key phase of informationization and mechanization as well as deepening reforms. A moderate, sustained increase in the military budget is thus necessary,” he said.

Although the rise in the defense budget in the past years has surpassed GDP growth, China’s military expenditure in 2014 accounted for less than 1.5 percent of GDP, well below the world’s average of 2.6 percent.

Per capita military spending is even less, representing only about 4.5 percent of the United States, 11 percent of Britain and 20 percent of Japan.