22 May 2020

China’s Official 2020 Defense Budget to Rise 6.6% to $178 Billion (1.27 Trillion Yuan): Lowest Growth Rate Since 1988 Exceeds All Other Major Nations’

The draft budget report disseminated today at Beijing’s Two Sessions annual meeting of the National People’s Congress (NPC) and National Committee of the Chinese People’s Political Consultative Conference (CPPCC) proposes an official defense budget of 1.268 trillion yuan ($178 billion) for 2020, an increase of 6.6% over 2019.

While reportedly China’s lowest such increase since 1988 (then 3.81%), it is still by far the largest planned increase for any major nation. Indeed, it reflects a determination to continue rapid military development at a time when virtually every other nation will struggle to do so given the effects of coronavirus and economic slowdown. This atop what has been the world’s second largest military budget and related spending, on China’s part, for quite some time.

Following the two new PRC articles appended below, the rest of this China Defense Budget Bookshelf offers years of information and analysis to situate PRC defense expenditures and explain why and how this all matters, greatly…

 

China Boosts Defense Budget by 6.6%, Lowest in Over 30 Years

By Zhao Lei | chinadaily.com.cn | Updated: 2020-05-22 10:50

China’s annual defense budget for the fiscal year of 2020 recorded the lowest growth rate in more than 30 years, according to a draft budget report released on Friday.

The central government proposed the annual defense budget at about 1.27 trillion yuan ($178 billion), a 6.6 percent raise year-on-year, showed figures from the report prepared by the Ministry of Finance and distributed at the opening meeting of the third session of the 13th National People’s Congress at Beijing’s Great Hall of the People.

The budget’s growth rate is lower than since the fiscal 1988, which had a 3.81 percent proposed increase rate in the defense budget.

In fiscal 2019, China planned to raise the defense budget by 7.5 percent, setting the military expenditure at nearly 1.19 trillion yuan. All of the budgeted money has been utilized, the report said.

The report is to be reviewed and discussed by NPC deputies.

At a news conference on Thursday night in Beijing, Zhang Yesui, spokesman for the annual NPC meeting, said China’s military spending is transparent.

China’s defense policy is defensive in nature and its defense spending is proportionate and restrained in terms of total size, per capita expenditure and proportion of GDP, he said.

 

China Slows Defense Budget Growth to 6.6 % in 2020

By Liu Xuanzun Source: Global Times

Published: 2020/5/22 9:56:42 Last Updated: 2020/5/22 12:00:36

China set its 2020 defense budget growth target at 6.6 percent, resulting in a draft budget of 1.268 trillion yuan ($178.2 billion), lower than the 7.5 percent growth in 2019.

The figure was made public on Friday in a draft budget report to be submitted to the annual session of the National People’s Congress (NPC).

This also marks the lowest defense budget growth rate in recent years.

This means China can provide sufficient funding for military development despite the economic impact brought by the COVID-19 outbreak, and while the growth has slowed down, it matches China’s current economic situation in the wake of COVID-19, analysts said on Friday.

China’s defense budget for 2019 was 1.19 trillion yuan, up 7.5 percent from 2018. China has maintained single-digit growth in its annual defense budget since 2016.

Song Zhongping, a Chinese military expert and TV commentator, told the Global Times on Friday that it is very normal that compared to last year’s 7.5 percent growth rate, this year’s 6.6 percent is not a significant slowdown considering the effect brought by the pandemic.

China is facing national security threats, including those taking place very nearby to China and in non-traditional security fields. Compared to these threats, China’s military expenditure was far from enough, Song said.

China is in need of moderate military budget growths to support its national defense, without which China’s economic achievements could be lost, Song said.

Wei Dongxu, a Beijing-based military analyst, told the Global Times on Friday that the increased defense budget can ensure the Chinese military’s major programs and key spending fields are not affected by the pandemic and will remain on schedule.

While the growth rate declined, which may prompt the Chinese military to make some choices in allocating expenditure, China’s overall national defense construction and the development of the military will not see a major impact, as enough funding is still available to key areas such as the development of new weapons and equipment, troops’ salaries and benefits and training expenses, Wei said.

The decreased growth rate is partially decided by China’s actual situation, and the pandemic has had an impact on economic growth in all countries, Wei noted.

Reasonable growth

China has scrapped a numerical economic growth target this year for the first time in decades.

China has kept its military expenditure/GDP ratio to under 2 percent in the past three decades, while other major countries like the US have been keeping this ratio to 3 to 4 percent in recent years.

With China’s economic volume growing, corresponding military strength is needed to protect it. Back when China’s economy skyrocketed at the beginning of reform and opening-up, military expenditure growth remained slow. Increasing the defense budget is only making up for what was lost back then, analysts pointed out.

Song said the defense budget growth rate of 6.6 percent for 2020 is not a high figure at all even under the COVID-19 pandemic.

China’s defense expenditure is categorized by application, namely personnel expenses, training maintenance fees and equipment spending, according to China’s Ministry of National Defense.

The Chinese military needs to procure a huge amount of expensive, advanced weapons and equipment to replace its vast arsenal of outdated ones; it is also boosting the intensity and extent of training; as the CPI increases, benefits of soldiers and officers also need to improve, Song pointed out.

The 6.6 percent growth rate of this year alone cannot solve China’s problem of the lack of military funding, but it is a process of gradual improvement, Song said, noting that if next year’s economic situation can be better, the military budget growth rate for next year should be higher.

The continued growth in the Chinese military budget comes at a time when the US is becoming increasingly aggressive and has conducted repeated military provocations against China in regions like the South China Sea and the Taiwan Straits.

Both regions have become flashpoints, which military observers say face the risk of escalating into actual military conflicts. The US has been sending warships and warplanes to waters and airspace near China more frequently, with some trespassing into Chinese territories. China has also been conducting patrols and exercises to safeguard its national sovereignty and territorial integrity.

China has huge national defense demands, which is a crucial factor in the military budget, a Chinese military expert who asked not to be named told the Global Times on Friday.

In the post-pandemic period, China faces more military threats from other countries, mainly the US. With Taiwan secessionists becoming more and more rampant, reunification by force with the island of Taiwan is always on the table, the expert said, noting that in this situation, increasing the defense budget must not stop.

China takes the development of the economy and the demands of national defense into consideration when deciding on the appropriate scale and composition of defense expenditure, according to the national defense white paper issued by the State Council Information Office in July 2019.

The 2020 defense budget should be seen as reasonable and appropriate, analysts said.

Not a threat

China’s military budget increase has been a hot topic for some Western officials and media to hype the “China threat” theory. An increase this year against the background of the COVID-19 pandemic could raise this rhetoric again, observers said.

“People should ask first, which countries are threatening China’s national security in the first place? They should ask the US, they should ask India, and some other neighboring countries and regions,” Song said.

China has contained the COVID-19 epidemic well, and its military contributed a lot and has demonstrated its capabilities. More spending will be put to strengthen the Chinese military’s capability in epidemic control and prevention as well as disaster relief, Song noted.

Whether a country poses a military threat to others or not is decided by its diplomatic and national defense policies and not by how much it increases its defense budget, Chinese officials and military experts said in previous years.

China has only a limited defense budget, and it is used for safeguarding the country’s sovereignty, security, and territorial integrity. This will not pose a threat to other countries, they said.

According to a report released by the Stockholm International Peace Research Institute (SIPRI) in April, the US drives global military expenditure growth, spending a whopping $732 billion on the sector in 2019, about four times higher than China’s official figure.

In response to a question saying China’s military spending was not transparent, Zhang Yesui, spokesperson for the third session of the 13th National People’s Congress, said at a press conference on Thursday that China has been submitting reports on its military expenditures to the United Nations every year since 2007.

“From where the money comes from to how the money is used, everything is accounted for,” Zhang said, noting there is no such thing as “hidden military spending.”

Related Global Times articles:

 

PREVIOUS INFORMATION & ANALYSIS:

China’s 2019 Defense Spending to Rise 7.5% to 1.19 Trillion Yuan (~177.61 Billion U.S. Dollars)

It’s official! In 2019 China will raise defense spending by 7.5% to 1.19 trillion yuan (about 177.61 billion U.S. dollars). That’s a large increase off an enormous baseline. The official figures were released today at Beijing’s biggest political meetings of the year—the “Two Sessions,” back-to-back meetings of two major PRC political bodies: the nearly-3,000-delegate National People’s Congress (NPC); and the Chinese People’s Political Consultative Conference (CPPCC), an advisory body.

Don’t get distracted by Beijing’s state media hype designed to downplay and justify: The big story about China’s defense budget for 2019 isn’t that the percentage growth rate is slightly lower than last year’s (0.6% less), it’s that it’s still huge at 7.5%! As for a potential expression of national priorities, this exceeds China’s 2019 economic growth rate target of 6-6.5%. This year, Beijing is continuing major military spending growth, at a rate slightly higher than official planned economic growth. This is consistent with its overall efforts in recent years. And it continues a multi-decade record of military spending growth that other countries can only envy. PRC defense spending has been growing at a rapid clip since 1989. All that adds up, compounding Chinese military capabilities over time… Even though many specifics remain murky, the sheer scale of PRC military might testifies to the tremendous transformation. So the key is not the small variation in year-to-year percentages, but rather what this is all adding up to.

Bottom line: 7.5% growth is rapid. It’s only a slowdown if measured against previous PRC defense budget growth. Indeed, the big picture dynamics have long been clear: China’s defense budget is the world’s second-largest by any measure. In recent years, it’s been growing at rate sustained by no other major power. And it’s powered by what is at very least the world’s second-largest economy, allowing for significant future funding increases even if China’s economic engine continues to slow down (as it almost certainly will).

***

China’s military is extremely large and powerful by any measure. Under Xi Jinping, China’s armed forces have made rapid and significant progress. Xi Jinping clearly has a very ambitious vision for realizing a “China Dream” that includes making China a relatively prosperous country with a strong military. He’s working hard not just to fund China’s military but also to continually emphasize its rapid development and that includes enacting the most ambitious organizational reforms in many decades. This is nothing short of extraordinary, and the goal is to create a modern joint People’s Liberation Army capable of fighting and winning modern wars. So people will rightly point out—and Chinese sources themselves point out—that China’s military still has a lot of work to do and progress to make. Xi wants China’s armed services to improve a lot more; but already they have formidable capabilities, particularly for scenarios that he prioritizes most highly.

We really need to ask ourselves what are the priority scenarios that China’s armed forces are designed to address. China’s not anywhere close to pursuing a global set of high-end scenarios like the U.S. military. China instead is taking the world’s largest navy by number of ships, concentrating these forces in a large part around the Near Seas. The major scenarios that it cares about could be called home games, rather than away games, whereas the U.S. Navy is dispersed all around the world. There’s simply no way the U.S. Navy is ever going to take all of its assets and focus them all on maritime East Asia.

All the time now we’re seeing new weapons systems being tested and fielded. China’s navy is receiving warships so quickly that Chinese sources liken this to “dumping dumplings into soup broth,” so in terms of hardware and weapons systems it’s very rapid progress. All this progress shows that China already under Xi is unquestionably much stronger militarily than it was even a few years ago; but exactly how strong remains a very, very difficult question to answer.

Budget numbers for the PLA Navy, for example, are not transparent, they’re not readily available. But it’s quite clear when we see tangible evidence of what the PLA Navy is actually spending money on, including a whole new set of expensive naval ships and growth in newly trained high-caliber personnel. It’s quite clear the PLA navy budget is growing at a pretty steady clip. This is not surprising because the PLA Navy is the force that can most directly protect the growing Chinese interests abroad and very conveniently it can put Chinese capabilities in the region without firing a shot.

We’re not going to be exactly sure what these numbers cover or how they compare to the United States or other countries. Every country counts its military budget differently. But when it comes to these big picture issues, we can see relatively clearly where China’s armed forces stand, the trends of their growth, the new directions in which they’re going and clearly overall these are armed forces to be reckoned with. In many areas they have weapons systems that only a few other countries possess.

If you look where China’s military was a few short years ago, under Xi the progress is truly tremendous. It is very impressive. Xi’s armed forces are a new set of armed forces for China, and he’s given a huge amount of the credit for achieving this and the results will keep pouring in under his leadership. No one has ever presided over anywhere close to this level of Chinese military development in Chinese history before Xi.

***

To be sure, China’s official military spending lags well behind that of the United States. America has a truly gargantuan defense budget, and uses it to fund an extremely ambitious array of military missions around the world. But this is by no means a secret: Long on this path, Washington has long been releasing a treasure trove of corresponding public data and statements. Nobody needs a security clearance to understand the extent of American defense spending, capabilities, or operations. Indeed, Chinese-language publications continually cover all these developments in excruciating detail.

Consider, by contrast, the extraordinary efforts that Beijing’s state media mouthpieces and spokespeople are making to minimize the purposes and extent of China’s military spending. All this without providing much in the way of official details regarding PRC defense spending at all. Beijing will not even release something as simple as a precise and credible breakdown of spending by service. Given this opacity, many observers around the world remain curious to know more about the world’s second-most powerful military, with the world’s second-largest budget.

To that end, this Bookshelf post contains both current and previous data and analysis on Chinese defense spending. I will update it continually with the latest sources and information as they become available. If you have any suggestions for content to post, please reach out to me via <http://www.andrewerickson.com/contact/>. Thank you!

***

Gordon Arthur, Asia-Pacific Editor, “China Continues to Splurge With $177 Billion Defence Budget,” Shephard Media, 5 March 2019.

… While this year’s rate of increase is lower than in 2018, it still equates to a huge increase over what is already a massive baseline; China possesses the world’s second highest defence budget. …

Andrew Erickson, professor of strategy at the China Maritime Studies Institute of the US Naval War College, commented: ‘Don’t get distracted by Beijing’s state media hype designed to downplay and justify. The big story about China’s defence budget for 2019 isn’t that the percentage growth rate is slightly lower than last year’s (0.6% less), it’s that it’s still huge at 7.5%.’

… The fact is that China’s continual outpouring of money into the People’s Liberation Army (PLA) is eclipsing every other country in the world bar the US.

… Questions also need to be asked why President Xi Jinping is splurging so heavily on defence, and why he is attempting to so rapidly modernise the PLA. The nation has a formidable military, although critical weaknesses remain in its structure and way of operating.

Erickson posed the question: ‘We really need to ask ourselves what are the priority scenarios that China’s armed forces are designed to address. China’s not anywhere close to pursuing a global set of high-end scenarios like the US military.’

‘China instead is taking the world’s largest navy by number of ships, concentrating these forces in a large part around the Near Seas. The major scenarios that it cares about could be called home games, rather than away games, whereas the US Navy is dispersed all around the world.’

The American academic added: ‘If you look where China’s military was a few short years ago, under Xi the progress is truly tremendous. It is very impressive. Xi’s armed forces are a new set of armed forces for China, and he’s given a huge amount of the credit for achieving this and the results will keep pouring in under his leadership.’

Erickson reminded, ‘All this progress shows that China already under Xi is unquestionably much stronger militarily than it was even a few years ago; but exactly how strong remains a very, very difficult question to answer.’

To be sure, China’s spending lags far behind that of the US, but the latter is very open about where money goes. …

In its budget, China still fails to provide even the most basic breakdown in spending for the four services of the PLA, leading to persistent questions from others about its lack of transparency.

Erickson also highlighted the opacity of Chinese spending. ‘Consider, by contrast, the extraordinary efforts that Beijing’s state media mouthpieces and spokespeople are making to minimise the purposes and extent of China’s military spending. All this without providing much in the way of official details regarding PRC defence spending at all…Given this opacity, many observers around the world remain curious to know more about the world’s second-most powerful military, with the world’s second-largest budget.’ … … …

***

Ben Westcott, “China’s Military Is Going From Strength to Strength under Xi Jinping,” CNN, 4 March 2019.

… … …Beijing is rapidly gaining ground on its American rival, by churning out naval vessels and making technological advances, according to Andrew Erickson, professor of strategy at the US Naval War College’s China Maritime Studies Institute.

“No one has presided over this level of Chinese military development in Chinese history before Xi Jinping,” he said. …

Directly comparing every aspect of two countries’ military budgets is impossible, said Erickson, because different governments count spending in different ways.

But the US expert said it was incontrovertible that China’s military budget was the second largest in the world.

“Clearly, overall, these are armed forces to be reckoned with. In many areas, they have weapons systems that only a few other countries possess,” he said.

“If you look where China’s military was a few short years ago, under Xi the progress is truly tremendous. It is very impressive.” …

“China’s navy is receiving warships so quickly that Chinese sources liken this to dumping dumplings into soup broth,” Erickson said. …

The major scenarios that China’s military cares about could be called “home games, rather than away games,” Erickson said.

The Chinese government has built a navy and armed forces designed to protect the country and exert its influence in the surrounding region, especially the East and South China seas.

The proof is in the military hardware that the two countries have focused on. … … …

***

Liu Jianna, “Worries Over Defense Budget Unwarranted,” China Daily, 3 March 2019.

Editor’s Note: China’s defense budget growth has always been an easy target of some Western media outlets. Why does China need to steadily increase its defense budget? And why there is no need for the world to be worried about it? Two experts share their views on this issue with China Daily’s Liu Jianna. Excerpts follow:

Defense budget growth normal and reasonable

Rear Admiral Yang Yi, former director general of the Institute of Strategic Studies, National Defense University PLA

Asked about this year’s defense budget, Zhang Yesui, spokesman for the second session of the 13th National People’s Congress said on Monday that it is necessary for China to reasonably increase its defense spending for military modernization. And China has the room of increasing its defense budget as the defense spending accounted for only 1.3 percent of its GDP in 2018 compared with more than 2 percent for main developed countries.

Zhang also said it is not the increase in defense budget, but a country’s foreign and defense policies, which decides whether it poses a threat to other countries.

But for a long time governments and media in several countries including the United States and Japan have hyped China’s military budget growth with different motives. The US wants China to put a cap on its military budget so as to maintain its absolute advantage in the security and military fields, as is evident from Washington’s “Indo-Pacific” strategy. In fact, it is part of the US’ desperate effort to sustain its all-around hegemony.

Japan, on its part, has been hyping up the so-called threat from the People’s Liberation Army, as well as portraying the Democratic People’s Republic of Korea as a security challenge so it can develop its own military power.

Yet a louder voice does not necessarily place a critic on a moral high ground, especially if the criticism is hollow. To begin with, whether in terms of its size, per capita military expenditure, or percentage of its GDP, China’s military budget remains rather low. For example, the US allocated funds equivalent to 3.15 percent of GDP to its military budget in 2017 according to the World Bank, while China’s defense budget added up to only 1.3 percent of its GDP. Moreover, the US’ military budget alone is equal to the military budgets of a dozen countries combined.

In addition, China has become increasingly transparent when it comes to modernizing the PLA, issuing white papers on the development of its military and conducting various overseas exchange programs on a regular basis. Apart from its defense policy which is defensive in nature, China has been most transparent in its strategic intentions. For instance, it promises never to use nuclear weapons first and is committed to avoiding conflicts and building friendly relations with neighboring countries, and has its warming relationship with Japan to show for that.

Facing different security challenges and demands, it is only reasonable for countries to devise different defense strategies to safeguard their national security and interests. Thanks to four decades of rapid economic growth, China is now the world’s second-largest economy and has the ability to spend more on defense to modernize its military and raise its defense personnel’s pay to strengthen national security.

Given the rising prices and China’s relatively good economic performance, the defense budget growth of 8.1 percent in 2018 is balanced and reasonable. Had it been lower, the Ministry of National Defense would face financial constraints and find it hard to carry out its various programs to safeguard the country’s security. By contrast, a very high defense budget would impose too heavy a burden on taxpayers and choke economic growth at a time when China is undergoing an economic transition, which requires abundant capital support. So the defense budget suits China’s development reality and security landscape, especially if we take into account various factors.

That Taiwan kicks up a row whenever Beijing unveils its defense budget shows it suffers from guilty consciousness. Had some Taiwan politicians not promoted “Taiwan independence”, the island would have had no reason to feel anxious or worried about Beijing’s normal increase in military spending. After all, the goal of increasing the defense budget is to safeguard the nation’s territorial integrity, among which deterring “Taiwan independence” separatists from making any wrong moves is an important part.

Important to raise soldiers’ salaries

Liu Qiang, a professor at the Institute of International Relations, PLA National University of Defense Technology.

As the third-largest country with 9.6 million square kilometers of landmass and 3 million square kilometers of sea area under its jurisdiction, China needs to spend what appears as a large sum of money to safeguard national security. But when compared with the US military budget of $686.1 billion for 2019, that sum is not at all large, especially if we consider the fact that China needs to significantly raise the salaries of its defense personnel, whose sacrifice in protecting the country’s national security has not yet been fully recognized.

The pay and treatment Chinese defense personnel get are relatively less than what many Asian countries’ defense personnel receive-let alone the US, whose defense personnel get the highest pay in the world.

As President Xi Jinping, who is also the chairman of the Central Military Commission, said, serving the military should be made a respected profession. To this end, the defense personnel’s financial wellness must be improved first to ensure they remain fully devoted to safeguarding national defense without having to worry about their families or their future.

It is vital for China to focus on its practical defense needs and ignore those who make a fuss over its rising defense budget. China should also strike a balance between safeguarding national security and promoting economic development-and the defense budget has been fixed by keeping that very fact in mind.

The views don’t necessarily represent those of China Daily.

***

Liu Xuanzun, “China Lowers Defense Budget Growth to 7.5% in 2019,” Global Times, 5 March 2019.

… Xu Guangyu, a senior consultant at the China Arms Control and Disarmament Association, told the Global Times on Tuesday that the figure shows the modernization of the Chinese military remains at a normal and stable speed instead of a premature rush. …

“The growth rate of the defense budget did not break away from the GDP growth target by much,” Xu said, noting that China’s military fund is still closely related to the GDP.

Li Daguang, a professor at the National Defense University of the People’s Liberation Army (PLA), said that instead of focusing on that the defense budget growth is higher than the GDP growth expectation, people should see that China’s military expenditure only accounts for a little of its GDP, far less than other major countries. …

Back when China’s economy skyrocketed at the beginning of reform and opening-up, the military expenditure growth remained slow. Now that China’s economy growth becomes more stable, it is reasonable that the defense budget rises faster than GDP, according to Li. …

Again, “China’s military modernization is meant for self-defense and not threatening other countries. We should not care much about what others say,” said Wei Dongxu, a Beijing-based military analyst.

People should see that China’s military development has also brought much benefit to the world, including anti-piracy, providing medical service to developing countries with naval hospital ships and taking part in UN peacekeeping missions, Wei noted.

“Whether a country poses a military threat to others or not is decided by its diplomatic and national defense policies instead of how much it increases its defense budget,” said the spokesperson for the second session of the 13th NPC Zhang Yesui at a press conference on Monday.

“China has only a limited defense budget, and it is used for safeguarding the country’s sovereignty, security, and territorial integrity. This will not pose a threat to other countries,” Zhang said.

Weapons and trainings

The military expenditure in 2018 was mainly meant for the development of weaponry and equipment, the improvement of training conditions, military reform, and troop salaries and benefits, the PLA Daily reported in March 2018.

This general direction will not change in 2019, although there might be a slight dynamic change in allocation, Xu said.

Although China has been developing advanced weapons like fighter jets, strategic bombers, ballistic missiles and aircraft carriers, the country’s overall military technology still lags behind countries like the US, and there are stockpiles of outdated weapons and equipment needed to be replaced with newer ones, analysts said.

The PLA has been undertaking intensive combat trainings in 2019 according to media reports. These trainings usually feature the usage of huge amounts of live munitions and realistic targets, and the deployment of large and advanced vehicles, vessels, and aircraft consuming expensive fuel.

As China intensifies these trainings to keep troops engaged during peace, sufficient funding is needed to make the exercises as realistic as possible, which was not possible in the past, experts said.

***

China to Lower Defense Budget Growth to 7.5 Percent,” Xinhua, 3 March 2019.

BEIJING, March 5 (Xinhua) — China will lower its defense budget growth rate to 7.5 percent in 2019, from last year’s 8.1 percent, according to a draft budget report to be submitted to the annual session of the National People’s Congress (NPC) opening Tuesday.

The 2019 defense budget will be 1.19 trillion yuan (about 177.61 billion U.S. dollars), figures from the report show.

The rate marks a fourth straight year for the budgeted growth rate to dip into the single digit since 2016, following five consecutive years of double-digit increases.

China’s budgeted defense spending growth rate stood at 7.6 percent in 2016, 7 percent in 2017, and 8.1 percent in 2018.

Describing China’s defense budget increase as reasonable and appropriate, Zhang Yesui, spokesperson for the annual session of the 13th NPC, said the raise aims to “meet the country’s demand in safeguarding national security and military reform with Chinese characteristics.”

***

Minnie Chan, “China Keeps Lid on Military Spending for Fourth Year in a Row,” South China Morning Post, 4 March 2019.

… … … A military source told the South China Morning Post that the defence budget increase had needed to reflect plans for the People’s Liberation Army (PLA) Navy to have six active aircraft carrier battle groups by 2035 – although some of these costs were not counted as part of the defence budget.

“It’s an open secret that the cost of the aircraft carriers’ development and construction would not be counted into the budget, but the navy needs to deploy specific flotillas, manpower and training to support this, which should fall under the annal budget,” the source said.

“The country needs to allocate a large sum of money for operation costs for the six carriers, such as comprehensive refits and check-ups every year.”

The PLA, the world’s biggest armed force, is undergoing a massive weapons upgrade including building at least six aircraft carriers, as well as an overhaul launched by Xi, who chairs the powerful Central Military Commission, to update and boost the combat-readiness of its 2 million troops.

“Our military spending should maintain a steady increase that is similar to last year’s [8.1 per cent],” Rear Admiral He Lin, a delegate of the Chinese People’s Political Consultative Conference (CPPCC), said on the sidelines of the annual gathering on Sunday.

“Such a growth rate would not be changed too much, because this is in line with the current needs of the PLA’s modernisation.

“We are a peace-loving military, but we must be prepared for war. At present, there is very smooth progress on weapons upgrades.”

Zhang Xiaoguang, a CPPCC delegate from the PLA’s Strategic Support Force, said the PLA should keep up the momentum of its military modernisation, with a steady budget increase being a must.

“All countries’ defence spending should meet their national strategic needs,” the former astronaut said.

This year will also mark the 70th anniversary of the founding of the People’s Republic of China, as well as the 70th birthday of the PLA Navy.

The PLA will hold a naval parade in Qingdao on April 23 and a National Day parade on October 1. However, spending for the two events – which involve thousands of troops and several months of training – would not be counted in the defence budget, according to Beijing-based military observer Zhou Chenming.

But Zhou added that the PLA’s military budget increase would also reflect the country’s slowing economic growth. In January, Beijing reported 6.6 per cent growth for 2018, its lowest figure for 28 years.

“Since the country’s economic development is not expected to go well in the coming years given the trade rows between Beijing and Washington, the PLA’s military budget will have limited growth, although that growth may slightly exceed the pace of GDP growth,” he said.

***

Zhao Lei, “Defense Spending Poses No Threat to Other Nations, Spokesman Says,” China Daily, 4 March 2019.

China’s defense expenditure is for the protection of the nation’s sovereignty, security and territorial integrity and does not pose any threat to other countries, according to Zhang Yesui, spokesman for the second session of the 13th National People’s Congress.

Zhang said at a news conference on Monday in Beijing that China always sticks to the path of peaceful development and follows policies that are purely defensive in nature.

“To judge whether a country poses threat to other nations, the key lies in its foreign and defense policies rather than the increase in its defense budget,” he said.

He made the remarks in response to a question on China’s perspective change to its defense budget this year.

Zhang said a reasonable and moderate rise in military expenditure is to meet the need of safeguarding national security and facilitating military reform with Chinese characteristics.

“Starting in 2016, the increases in our defense budget have been staying inside single digits each year, as opposed to double-digit rises in the five consecutive years before that year,” the spokesman said. “Compared with other countries, our defense spending in 2018 accounted for about 1.3 percent of our GDP for that year, while some developed nations maintained a 2-plus percent proportion.”

China raised its defense budget by 8.1 percent in the fiscal year of 2018.

***

Hu Weijia, “China Requires Increase in Annual Defense Budget,” Global Times, 3 March 2019.

Nation requires increase in annual defense budget

Although China’s economic growth is slowing down, ordinary Chinese people hope the country can announce a steady increase in its defense budget during the annual plenary session of the National People’s Congress, which is scheduled to start on Tuesday.

One netizen suggested on Sina Weibo over the weekend that without a strong defense capability, such tasks as the Belt and Road Initiative or the internationalization of the yuan will be hard to achieve. Not many netizens are rational economists or politicians, but chatter on the internet may offer insights into views that circulate within Chinese society.

If China raises its defense budget at a pace that is faster than its GDP growth rate, that will be in line with many Chinese citizens’ expectations.

China’s defense budget is the world’s second highest, but the country’s military power isn’t the second-strongest in the world. Its military expenditures remain far lower than levels in other major countries in terms of the percentage of the defense budget in GDP or government revenue, as well as the average per capita defense expenditure.

China’s military spending is not in proportion to its economic growth and security needs. The Chinese military must have enough money to make up for missed lessons and modernize its troops.

China is witnessing a boom in outbound investment. The more overseas projects Chinese companies develop, the more security concerns they will face. As China has stepped into the frontline of international affairs, it must speed up its national defense power to protect the legitimate interests of Chinese people. The international environment now is more complicated than before. Ordinary Chinese people are in favor of a rise in the defense budget, because they hope China can build a strong national defense force to provide them with protection.

We hope China’s defense budget growth can be higher than its GDP expansion in 2019. China’s economic slowdown is a fact, but the economy remains dynamic. Government revenue will continue to increase in 2019. The country has sufficient resources to support a higher defense budget.

Military equipment and technology are being updated more quickly than ever, and this process is getting more expensive as prices of materials rise in China.

It is reasonable for China to increase its defense budget at a faster pace to maintain the combat capability of the People’s Liberation Army.

The country needs to boost the development of technology for military drones, satellite navigation and positioning, long-range radar detection and some other military technologies. Conversely, technical innovation will also promote China’s economic growth.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn
Newspaper headline: Nation requires increase in annual defense budget

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5 March 2018

Xi’s Strong Military Dream: China’s Defense Budget to Grow 8.1% to ~$175 billion This Year, Rate Exceeds ~6.5% Economic Growth Target

A major announcement today from the National People’s Congress in Beijing: China’s defense budget will grow by 8.1% to ~$175 billion (1.11 trillion yuan) this year, a rate increase from the 7% in 2017. This latest raise represents a reversal of three years of slowing growth. It exceeds this year’s economic growth target of ~6.5%.

Here’s my take:

 China’s official defense budget growth thus continues to exceed official economic growth. This shows that Xi’s grand strategy to ‘Make China Great Again’ includes not only a ‘China dream’ generally but also a ‘strong military dream’ specifically.

By any measure, China has the world’s second largest defense budget after the United States. It has already enabled China to achieve:

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Read the Chinese and English-language full-text of the National People’s Congress reports, courtesy of the Wall Street Journal:

1) Report on the Work of the Government (Premier Li Keqiang)

2) National Development and Reform Commission Draft Plan for National Economic and Social Development

3) Ministry of Finance Budget Report

 

FURTHER BACKGROUND & ANALYSIS:

Simon Denyer, “China Boosts Defense Budget in Quest for ‘World-Class’ Military But Tells Neighbors Not to Worry,” Washington Post, 4 March 2018.

Andrew S. Erickson, “Beijing to Expand Defense Budget by About 7% This Year; Says it’s Enough to Protect ‘Rights and Interests’,” China Analysis from Original Sources 以第一手资料研究中国4 March 2017.

Jeremy Page and Chun Han Wong, “China Eases Foot Off Gas on Military Spending,” Wall Street Journal, 4 March 2017.

Andrew S. Erickson and Adam P. Liff, “The Limits of Growth: Economic Headwinds Inform China’s Latest Military Budget,” China Real Time Report (中国实时报), Wall Street Journal, 5 March 2016.

Andrew S. Erickson, “China Announces 7.6% Budget Increase to $146.67 Billion (954.35 Billion Yuan): Comprehensive Context & Analysis,” China Analysis from Original Sources 以第一手料研究中国, 4 March 2016.

Andrew S. Erickson and Adam P. Liff, “China’s Military Spending Swells Again Despite Domestic Headwinds,” China Real Time Report (中国实时报), Wall Street Journal, 5 March 2015.

Andrew S. Erickson and Adam P. Liff, “The Budget This Time: Taking the Measure of China’s Defense Spending,” ASAN Forum 2.2 (March-April 2014).

China’s Military Spending: At the Double,” The Economist, 15 March 2014.

Edward Wong, “China Announces 12.2% Increase in Military Budget,” New York Times, 5 March 2014.

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.

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

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 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.