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China's Claims of Defense Spending Boost in Doubt

Mar. 8, 2014 - 03:45AM   |  
By WENDELL MINNICK   |   Comments
CHINA-POLITICS-CONGRESS
Chinese military delegates arrive March 5 for the first session of the National People's Congress in Beijing. China's defense spending is increasing, but because numbers do not account for inflation, experts say the increases aren't as high as Beijing claims. (AFP/Getty Images)
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TAIPEI — One day after the US released its proposed defense budget for the coming year, China did the same, boosting defense spending by more than 12 percent. But analysts caution that the numbers don’t tell the whole story.

According to the Ministry of Finance, national defense spending is 808.23 billion yuan (US $131 billion), up 12.2 percent from the previous year. Last year, it was 730 billion yuan (US $119 billion), a 10.7 percent increase from the year before.

Despite the increases, actual spending was less that what China had earlier announced it would spend.

“According to my records, 2013 is the second year in a row in which China’s actual defense spending wound up being significantly less than was announced at the beginning of the year,” said Roger Cliff, senior fellow with the Asia Security Initiative at the Atlantic Council.

“The announced budget in March 2013 was ... an increase of 10.7 percent over 2012. Actual expenditure in 2013 was ... an increase of only 7.6 percent over 2012.”

The announced increases also never account for inflation, Cliff said. “Inflation in 2013 was expected to be 3.2 percent, official inflation figures for 2013 haven’t been released yet, as far as I know, so the increase in defense spending from 2012 to 2013 was only 4.3 percent in real terms.

“In fact, since 2009, China’s defense budget has grown by an average of only 4.7 percent in real terms,” Cliff said. “And yet, because the increases are always announced in nominal terms, not real terms, and the budgets announced at the beginning of the year have been exceeding the amount actually spent, everyone is still talking about ‘annual double-digit increases in China’s defense spending.’ ”

“One additional bit of information: Inflation in 2014 is expected to be 3.5 percent, so even if defense spending winds up being as high as announced for 2014, that will still only be an 8.4 percent increase over 2013 in real terms,” Cliff said.

This is not new or surprising, said Richard Bitzinger, senior fellow for the Military Transformations Program at the S. Rajaratnam School of International Studies in Singapore.

“About the only piece of real news here is that the defense budget is up, nothing new there, by about 12 percent. That figure is a bit on the high side for recent years — last year’s increase was ‘only’ around 10 percent — but it’s in keeping with the general trend since the late 1990s,” he said.

“Figure now 17 straight years of near-double-digit increases in defense spending — that’s pretty impressive. Few countries have ever achieved that.

“But what does it mean?” Bitzinger said. “All the boilerplate being put out by the Chinese government that this increase is just for ‘defensive’ purposes is nonsense. There is no strictly ‘defensive’ or ‘offensive’ nature to most arms modernization efforts.”

He added that most modern armaments are neutral, and the offensive/defensive nature of them depends on how they are used. “And certainly, such spending increases and [Army] modernization activities look ominous in the light of Chinese aggression in places like the East and South China seas.

“In short, this is a long-term worrisome trend in China’s military buildup, and so long as China continues to be opaque about its regional political-military intentions and what it wants to use its modernizing military for, then others have a right to be concerned.” ■

Email: wminnick@defensenews.com.

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