Asian arms race is on, stoked by China’s booming defence budget, Japanese analysts say

China’s announcement that it would increase its military spending by more than 8 per cent this year has caused concern in Japan, with analysts suggesting that other nations in the region that are locked in territorial disputes with Beijing or concerned at its growing might now have no choice but to raise their own defence outlays.

The stepped-up spending on the Chinese military was announced on Monday at the opening of the National People’s Congress in Beijing. Premier Li Keqiang delivered a speech that detailed policies for the coming year, including increasing annual defence outlays to 1.1 trillion yuan (US$173.6 billion).

“Faced with profound changes in the national security environment, we must … firmly uphold the guiding position of Xi Jinping’s thinking on strengthening the armed forces as we develop national defence and the armed forces,” Li said in his speech.

The defence budget surpassed the 1 trillion yuan level for the first time in 2017 and Xi has vowed to make China’s military “world class” by the middle of the century.

“That is a large increase – but it must also be remembered that it is an open secret that China’s military spending is far bigger than their government will ever admit,” said Yoichi Shimada, a professor of international relations at Fukui Prefectural University.