The mainland's rapid economic growth and rising wealth have driven increases in military spending. Now that the economic growth rate has slipped back into single digits, with 7.5 per cent targeted this year, another double-digit rise in defence spending is bound to raise questions about Beijing's intentions. The pace of growth, however, has eased to 10.7 per cent this year from 11.2 per cent last year and 12.7 per cent the year before. Analysts see this as an attempt to play down the "China threat" factor among neighbours. And while the headline increase remains in double digits, it does not take into account this year's inflation target of 3.5 per cent. After adjusting for that it is more in line with the growth in GDP.
The finance ministry's budget report to the National People's Congress said the increase would be used to improve PLA working and living conditions and further modernisation. Analysts point out that China's military spending comes from a relatively low base, particularly in terms of modernisation. Critics, on the other hand, say the official budget of 720 billion yuan (HK$889 billion) does not disclose all military spending - such as weapons research and development and arms imports - and that there should be more transparency. Even if the real value of China's defence spending is double the headline figure it is still less than half the US military budget.
Mainland military budgets and defence white papers typically lack detail about what China intends to do with its increased spending, sophisticated new weapons and hardware. Military commentators have tended to dismiss calls for more transparency, citing lack of mutual political trust as an obstacle to China building more military confidence with other countries. But that sentiment needs to be balanced against the unease that the rapid military build-up has caused among some of China's neighbours.
But territorial disputes with neighbours underline the need for the PLA to be alert to the need to enhance transparency and explain China's peaceful intentions.