04 March 2017

Beijing to Expand Defense Budget by About 7% This Year; Says it’s Enough to Protect ‘Rights and Interests’

My personal take: As defense spending remains hotly debated in capitals across the West, China continues the concerted multi-decade investment that has already given it what is undisputedly the world’s second-largest defense budget. China’s rate of growth in military spending remains among the highest of any country. This spending comes atop the second highest defense budget baseline in the world—only the United States has a larger defense budget foundation on which to build. Among other major results, China’s efforts have already yielded the world’s largest sub-strategic ballistic missile force and the world’s second-largest navy.


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

Beijing to expand defense budget by about 7% this year; says it’s enough to protect ‘rights and interests’

China’s defense budget will expand by about 7% this year, the slowest pace this decade, but a senior Chinese official said it was still enough for Beijing to prevent “outside forces” from interfering in its territorial disputes.

Chinese military spending for 2017 would be equivalent to about 1.3% of the country’s economic output, roughly the same proportion as in recent years, said Fu Ying, a spokeswoman for the national legislature, at a news conference Saturday. Ms. Fu didn’t provide other details on this year’s defense expenditure, expected to be included in an overall budget report Sunday, the opening day of an annual meeting of the legislature, known as the National People’s Congress.

The increase in spending still gives China the world’s second biggest defense budget after the U.S. It continues a robust modernization program that over the past quarter-century has transformed the Chinese military into a formidable regional power and burgeoning global one, with outlays going to build naval, air force and other capabilities that allow Beijing to project power far from the Chinese mainland.

By lowering the rate of growth, however, President Xi Jinping is keeping military spending roughly in step with the overall economy and avoiding a costly arms race with the U.S. following President Donald Trump’s proposal last month to do away with previous spending limits and increase the Pentagon budget by about 2% from current levels. …

After increasing military spending at double-digit rates for most of the past 25 years, the Chinese government began slowing the pace in recent years as the economy began downshifting. In 2016, its defense expenditure was projected to expand by 7.6 % to about $146.6 billion.

Still, the growth in spending is faster than the overall economy, reflecting Mr. Xi’s determination to continue the military modernization program, according to experts.

Many experts estimate China’s actual military spending is significantly higher than the published budgeted figures, which aren’t thought to include big ticket items such as weapons purchases.

China’s real military spending will almost double between 2010 and 2020, reaching $233 billion a year by the end of the decade, according to a report in December by IHS Jane’s, a provider of defense information and analysis.

The official defense budget includes significant items such as salaries and the cost of a plan unveiled by Mr. Xi in 2015 to cut the armed forces by 300,000 troops and overhaul its Soviet-modeled command structures, experts said.

With troop numbers declining, the 7% increase suggested “funding is still being channeled towards investment in new equipment and the wider process of modernizing” the Chinese military, said Craig Caffrey, an expert on defense budgets at IHS Jane’s.

Mr. Caffrey said the increase was likely to more than match growth in military spending in all other Asia Pacific countries combined in 2017.

“China continues the consistent multidecade investment that has already given it what is undisputedly the second-largest defense budget in the world,” said Andrew Erickson, an expert on China’s military at the U.S. Naval War College.



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.