China’s Military Spending: As You Were

China’s resumption of double-digit growth in its military budget for 2011 will prompt the usual alarms, but it represents no more than a return to business as usual. Last year was only the second since 1989, when Beijing launched its PLA modernization program, that China hasn’t increased its military budget by double digits, in keeping with its long-term economic growth and quest for global and regional influence. The proposed 12.6% increase for 2011 to 583.6 billion yuan ($88.9 billion) is actually a tad below the long-term average of 12.8% since 1989.

That modernization drive took China to being the world’s no 2 defense-spender in 2008 after the U.S., which still spends at least four times as much as China on its military, even accounting for China’s off-budget military spending, which has been guesstimated to take the total to $100 billion-150 billion. Foreign weapons-systems acquisitions, military-related R&D, the  paramilitary security forces and some expenses for peacekeeping and disaster relief operations are all off-budget as is income from the PLA’s commercial enterprises and defense industries, and international arms sales.

Part of the latest increase is to cover inflation in pay, benefits and basic provisioning for active military personnel and veterans. Pay and benefits for the 2.3 million-strong PLA already account for 35% of the official military budget. They are expected to see a big increase in step with the civilian pay rises being seen and planned for the economy as a whole (the new five-year plan envisions a tripling of the average wage for factory workers). That is also a sign at this time of significant political, economic and social transition that the Party leadership wants to be sure that it has the PLA onside, just as the higher and more assertive profile of the military in recent months is confirmation of the military’s continued political clout in the highest circles.

Beijing’s claims that its military programmes are purely defensive are not generally accepted, which suggests a continuing arms race in Asia (India, for example, is proposing a larger percentage increase in its military budget for 2011 than China). There is no doubt that there is to be no cutting back on the build-up of China’s military forces, particularly the navy, which is developing submarine and carrier fleets to the extent it can be a power in regional waters, and the logistics capability of the national command and support infrastructure. But China has been doing that for years. The 2011 military budget just keeps it on track.

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6 Comments

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6 responses to “China’s Military Spending: As You Were

  1. dylanjones

    The military budget announced is actually nearer 13 percent greater than that announced at the identical session of the NPC last year. And the 2010 announced budget was actually around 10.8 percent higher than that of 2009 –
    2011 = 601.1 billion yuan
    2010 = 532.115 billion yuan
    2009 = 480.686 billion yuan
    (source = China Daily)

  2. These are the relevant paragraphs from the finance ministry’s budget report:

    National defense spending [in 2010] amounted to 518.227 billion yuan, 99.8% of the budgeted figure and. an increase of 7.3%. This difference between the actual and budgeted amounts was primarily due to actual settlement allowances for discharged military personnel being less than expected. This figure consists of 517.635 billion yuan in central government spending and 592 million yuan in transfer payments to local governments. These funds were used to improve the living conditions and benefits of army officers and enlisted personnel, strengthen the informationization of the army, increase its equipment and supporting facilities appropriately, and improve its ability to respond to emergencies and disasters.

    The appropriation for national defense spending [in 2011] is 583.591 billion yuan, an increase of 12.6%. This figure consists of 582.956 billion yuan of central government spending and 635 million yuan in transfer payments to local governments. These funds will be used mainly to modernize the army and improve the living conditions of officers and enlisted personnel.

    –CB

  3. dylanjones

    Can you explain the 18 billion yuan difference between the Ministry of Finance’s appropriation for national defence and that announced by Li Zhaoxing the day before?

    • chinabystander

      Something off-budget came on, something previously designated a non-defense expenditure changed categories, perhaps from internal security, or science and technology research, or there is some direct local government spending not accounted for by the finance ministry under transfer payments to local governments. We are still trying to put our finger on which it is. — CB

  4. Pingback: Four Points On China’s Military Build-Up | China Bystander

  5. Pingback: China’s Military Modernization: Stepping Ahead | China Bystander

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