Is China avoiding arms race with US by setting ‘low-key’ defence budget?

PUBLISHED : Thursday, 09 March, 2017, 12:56pm
UPDATED : Thursday, 09 March, 2017, 11:04pm

A 7 per cent defence budget increase rate for the world’s biggest army was carefully decided and aimed at keeping China from becoming tangled in an arms race with the United States, Chinese military experts say.

However, overseas military analysts said Beijing’s apparent attempt to downplay the sensitivity of the nation’s defence budget figure would stimulate more speculation over its accuracy and the People’s Liberation Army’s strategic development.

Beijing-based naval expert Li Jie said the 7 per cent increase, which is the smallest annual increase since 2000, showed that “Beijing wants to clarify a long-standing misunderstanding” at home and overseas that the PLA is in an arms race with the US.

“China’s defence budget was decided by its comprehensive national strength, including the country’s strategic needs and domestic economic development,” he said. “It’s a norm that will not be changed, no matter how much the US increases its military spending.”

China all quiet on its military spending front

He said that downplaying the figure also aims at differentiating China’s strategies from those of the US, which are used to protect its national interests by intervening in global and regional security.

“The US wants to be the global police, but China just takes care of its peripheral security environment,” he added.

Dr Rajeev Ranjan Chaturvedy, a research associate at the Institute of South Asian Studies at the National University of Singapore, said China’s geostrategic situation, economic and defence capabilities gave it different priorities and therefore different military needs than its US counterpart.

“The US does not have problems with neighbours, but China has territorial issues, both land and maritime,” he said.

China and India have ongoing border disputes in Tibet, and there are maritime conflicts with its Southeast Asian neighbours over the South China Sea.

The defence spending rate was announced by Fu Ying, spokeswoman for the National People’s Congress, one day before the opening of its annual session last Saturday, but the precise figure was omitted from the annual budget report released by the Ministry of Finance on Sunday, breaking a decades-long tradition.

The state-run news agency Xinhua released the detailed spending figure on Monday amid questions over Beijing’s commitment to transparency in its military outlay, saying defence spending this year would rise by 7 per cent to 1.044 trillion yuan (US$151 billion).

The rate surprised both domestic and overseas observers as President Xi Jinping, who also chairs the powerful Central Military Commission, has begun a comprehensive military overhaul, including a cut of 300,000 personnel to turn the bulky army into a nimble and capable fighting force.

Chaturvedy said 7 per cent was “a decent growth rate”, but he would not “take it as an accurate value” amid China’s growing military might and assertive territorial claims. Critics say the real outlay could be much higher than the ­official figure.

“Many expenses and investments are of dual capability use and serve strategic and military purposes but are not included normally as part of defence budget,” Chaturvedy said.

China raises military budget by 7pc amid slower economic growth

Chinese Finance Minister Xiao Jie on Tuesday denied any problem with transparency in defence spending plans.

“I can unequivocally tell you that the so-called ’non-transparency’ issue does not exist,” Xiao told a NPC news conference in Beijing, saying defence and foreign affairs spending plans were factored into drafts of the budget “and there was no need to repeat them in the budget report”.

Some military personnel attending the congress said all delegates had been briefed on the budget draft at a closed door session one day before the opening of the annual meeting.

However, a military insider said that even though congress members were briefed, they would not understand the full picture of the spending breakdown.

“It’s impossible for the powerful Central Military Commission to provide details of specific spending to the congress because there are so many top secret and confidential parts in it,” the source said. “Briefing them is just one of the legal procedures to let the NPC, which is well-known as a rubber stamp, read it and pass it.”

Shanghai-based military commentator Ni Lexiong said the small defence spending increase indicated Beijing’s hopes of building a friendly relationship with Washington, even though the administration of US President Donald Trump proposed a near 10 per cent increase in its defence budget last month.

“If Beijing follows the US to have a near double-digit increase on defence spending, it will strain bilateral relations with Washington, and also make its neighbouring countries very nervous, believing that the world’s two big powers are preparing for a war,” Ni said.

Bigger Pentagon budget ‘could challenge China’

Beijing had learned a lesson from the collapse of the former Soviet Union, he said, which was exhausted after its arms race with the US during the cold war.

However, Professor Jonathan Holslag, head of research at the Brussels Institute of Contemporary China Studies, said so far neither China nor the US, or any other Asian country, has been able to find a “peaceful way out of the numerous conflicts” as tensions continue to grow in the Asia-Pacific region.

“In terms of military spending, China’s budget is already bigger than that of its neighbours combined,” Holslag said. “The US is the only power able to keep it in check and in the long run, China is seeking to break through America’s Pacific line of defence. No doubt.”