China’s military spending in line with its geopolitical interests

Modest rise in budget for the armed forces is a reflection of the country’s economic realities and its standing in the world

PUBLISHED : Tuesday, 08 March, 2016, 11:23pm
UPDATED : Tuesday, 08 March, 2016, 11:23pm

China has long been making its neighbours and the US jumpy with annual double-digit increases in military spending. As the National People’s Congress opened, though, it was announced that in keeping with a slowing economic growth rate, the defence budget for the coming year would rise by 7.6 per cent. It is the smallest hike for six years and a pragmatic reflection of circumstances. As essential as modernising the armed forces may be, the task is being carried out sensibly rather than through a headlong rush, as has been claimed by rivals.

The economy grew by 6.9 per cent last year, the slowest rate for decades, and government revenues are up just 5.8 per cent. That has brought economic difficulties, with increased costs to help the poor and unemployed. Greater funding has to be allocated towards essential reforms to the tax system and moving from an industrial base to one focused on technology. The lower rate of military spending, taking into account decreased GDP growth and inflation, is based on those realities.

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Hawkish members of the military had been seeking a substantial rise in spending to hasten the modernisation process and deal with challenges to territorial disputes in the South and East China seas. There has also been concern about the source of funding for the 300,000 soldiers President Xi Jinping (習近平 ) last year announced would be retrenched to streamline fighting forces. But instead of the increase of up to 20 per cent that some had been calling for, the coming budget will grow slower by 2.4 percentage points on the level for 2015 and considerably below the 9.5 per cent average between 2005 and 2014. Critics contend the spending of 954.35 billion yuan (HK$1.137 trillion) is not in proportion to security needs.

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Those with a vested interest are prone to overstating threats. China needs more advanced weapons systems and to update its fleets of aircraft and naval vessels, but not at a pace that is out of proportion to economic or geopolitical conditions. Although the latter are growing as interests and influence expand, it would be wrong to contend that the risk of conflict has risen. While the US has been showing its military muscle in the South China Sea and building alliances with neighbouring countries, it is doing so to assert its superpower status. China understandably wants to closely monitor developments.

A slower growth of military spending calms concerns about China’s rise. Greater transparency will further allay fears. But governments have to also be mindful of the nation’s place in the world and its need to protect its expanding interests.