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Back to Double Digits: China's Latest Defense Budget

Posted By Dean Cheng On March 4, 2011 @ 7:30 pm In International | Comments Disabled

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As the People’s Republic of China (PRC) prepares for the opening of the National People’s Congress and the unveiling of the Twelfth Five-Year Plan, the budget for the People’s Liberation Army (PLA) was announced [2]. Military spending in 2011 would increase from 532.1 billion renminbi ($81 billion) in 2010 to 601.1 billion renminbi ($91.5 billion).

This would represent a 12.7 percent increase from 2010 to 2011, compared with the 7.5 percent increase from 2009 to 2010, clearly suggesting that last year’s lower increase (single-digit rather than the annual double-digit increase of the last two decades) reflected the impact of the global economic downturn rather than a slowdown in Chinese defense spending.

In examining Chinese claims regarding defense spending, few believe the figures provided. There is little transparency into what Chinese defense budgets include. More importantly, such aspects as space and cyberwarfare capabilities are almost certainly not included in Chinese defense budget figures, despite Chinese acknowledgement that these are of growing importance in PLA conceptions of future warfare. Thus, Chinese announcements of defense spending should be seen as establishing a baseline of what the PRC acknowledges it is spending on defense, as well as reflecting relative growth patterns.

It should be noted that increases in Chinese defense spending are inevitable. China is the world’s second-largest economy, it is heavily reliant on imports of oil and raw materials to fuel that economy, and, consequently, China has increasingly global concerns and interests. The shift from a military focused on local defense to one with regional and even global reach will not come cheaply. Moreover, the PLA is increasingly focused on improving quality, in terms of both weapons sophistication and unit training. As the PLA acquires more advanced fighters, submarines, and tanks, equipment costs will rise; similarly, unit training (including fuel costs) will represent a growing percentage of PLA expenditures.

What is most worrying is the lack of official transparency in the budget and China’s intended strategic purpose. Coupled with the continued and increasing assertiveness of China in the region—as reflected in the very recent incidents [3] around the Senkaku/Diaoyutai (80 nautical miles off Palawan, Philippines) and around the disputed Spratly Islands—China has given little reason to assume anything but the worst about their intentions.


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URL to article: http://blog.heritage.org/2011/03/04/back-to-double-digits-chinas-latest-defense-budget/

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[1] Image: http://www.foundry.org/wp-content/uploads/China-Navy.jpg

[2] was announced: http://www.telegraph.co.uk/news/worldnews/asia/china/8360978/China-to-increase-defence-spending-by-12.7-per-cent-in-2011.html

[3] very recent incidents: http://www.washingtonpost.com/wp-dyn/content/article/2011/03/03/AR2011030306541.html

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