China’s defence budget grows a ‘mere’ 7.6%

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On 6 March China’s National People’s Congress (NPC) announced a defence budget of US$147 billion, a 7.6% rise over last year. This compares with a 10.1% hike the previous year.

Given that some analysts were predicting a 20% explosion in the budget, 7.6% is something of a disappointment. Certainly it reflects the stronger economic, social and demographic headwinds that China faces.

9N5A3600For the past three decades (except for a 7.5% blip in 2010) Beijing has pleasured the People’s Liberation Army (PLA) with double-digit annual growth. The PLA enjoys the world’s second-highest defence budget behind that of the US ($573 billion for 2016).

As well as the total amount, we need to remember how China is spending its money. Much of it is going on asymmetric weapon systems (e.g. missiles, submarines, cyberwarfare, space/satellite technology) that give Beijing a decided edge in its periphery. The PLA’s sub-strategic ballistic missile force is already the world’s most powerful, for example.

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Premier Li Keqiang said China will ‘strengthen in a coordinated way military preparedness on all fronts and for all scenarios’. He listed priorities to justify increasing this year’s spending. One is the fact that 300,000 soldiers are being dismissed and that they need to be taken care of.

A second reason given was ‘maritime rights and interests’. This reflects China’s concern over the East and South China Seas, especially amidst stronger US and regional pushback against Beijing’s free-swinging claims in the South China Sea. It is no surprise that Beijing is using US Navy freedom of navigation warship patrols as its raison d’être to militarise the region, even though this argument is totally disingenuous.

IMG_9699We are not going to see Beijing back down on its maritime territorial claims, so we will see continued political and security instability in the Asia-Pacific region. Most unease will come from countries close to China’s borders, examples being Japan, the Philippines and Vietnam.

Nevertheless, this year’s budget goes to show that there are limits to what China can spend on its military. A bottomless pit of money is not available, despite the PLA wishing it so.

9N5A8956Incidentally, public-security funding increases 5.3% this year to a reported sum of $25.6 billion. However, this figure must be treated with caution. In 2013 it was revealed China spent more on internal security than it did on the PLA. Since then Beijing has been coy about publicising its internal-security budget, and the quoted amount does not include regional public-security budgets. If these were included, spending would likely continue to surpass external defence expenditure.

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