Writing before publication of the 2013 budget, Liff and Erickson note that China's defense spending is three times that of India and ranks second only to that of the U.S. As alarming as that may be to China's neighbors—especially when coupled with Beijing's increasingly aggressive diplomatic stance—the objectives in China's military buildup are increasingly clear and, indeed, unsurprising, they argue.
Like many developing Asian countries, China reveals few military spending details, but Liff and Erickson write: “Especially when it comes to future defense spending priorities, Beijing's leaders have boosted military spending for precisely the reasons that they have stated consistently: to compensate for inflation and past neglect, consolidate funding into a unified budget and improve capabilities to address outstanding territorial and maritime claims.”
Analyst Tim Huxley of the International Institute for Strategic Studies in Singapore agrees. “China's defense budget figures may not be transparent, but the intentions are fairly clear,” he says.
Lee is not much reassured by the mere clarity of intentions, however. China's strengthening of its ability to address territorial disputes is the very point, he says. “China has every right to do this and to play some catch-up on past relative neglect of its military, but the region has every right to be concerned—and they are, given China's size and stated ambitions.”
He adds that while “a country like Malaysia can get away with poor military transparency because it cannot reshape the region,” China “has to be judged differently” since it could potentially do so.
To Bitzinger, the real question about the budget is its impact. “How much has all this spending affected the war-fighting capabilities of the People's Liberation Army? . . . The PLA is still incredibly backward in so many areas. . . . It's the old saw: they've come a long way, but they still have a long way to go.”
China's total military spending in 2010, including items off the defense budget, was 2.1% of gross domestic product (GDP), according to the Stockholm Institute for Peace Research. It has been steady at or just above 2% of GDP since the beginning of the last decade, after climbing from a low of 1.6% in 1997, the institute says. At the end of the 1980s, China was spending 2.5% of its then much smaller economy on defense.
The U.S. spent 4.8% of GDP on defense in 2010, Japan 1.0%, the U.K. 2.6%, France 2.3% and Russia 3.9%, the institute estimates.
China's Defense Budget Growth Rate
|At then-year prices At constant prices GDP Growth Rate|
|Source: Adam Liff and Andrew Erickson|