05 March 2014

China Announces 12.2% Increase in Military Budget

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

Andrew S. Erickson, an associate professor at the U.S. Naval War College, said that China’s military spending growth was impressive but could slow, given that it is dependent on the nation’s overall economic health.

“China’s military budget growth continues to steam ahead rapidly, driven by an economic engine that — at least until recently — seemed indefatigable,” he said in an email. “Today China is the envy of the world: no other major power can sustain that rate of military or economic growth. But what if China’s economic locomotive continues to slow down, even as competing societal claims cause increasing burdens and expectations to be hitched to it?” …

Mr. Li, the prime minister, also said Wednesday that China’s economic growth rate for 2014 was expected to be 7.5 percent, which is consistent with projections by many analysts. The target for the consumer price index, a measure of inflation, is 3.5 percent.

Unlike in recent years, the Finance Ministry on Wednesday did not release revenue and expenditure budgets of local governments, saying in a report that “related data is still being collected.” The lack of data made it impossible to tally the total domestic security budget for 2014. The ministry said the budget from the central government for public security was $33 billion, but most of the financing of the huge domestic security apparatus is in the budget of local governments. In 2011, the announced total amount was 624.4 billion renminbi, or $95 billion, the first time the planned budget for the domestic security apparatus, led by Zhou Yongkang at the time, had exceeded the official military budget.

That trend has continued each year, and in 2013 the announced amount was 769 billion renminbi, an 8.7 percent increase over the previous year. The knife murders of 29 civilians last weekend in the Kunming train station, which appeared to be an act of domestic terrorism with roots in ethnic conflict, will no doubt contribute to calls for even greater increases in security spending.

Relevant readings and media:

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, “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.