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Dan Steinbock

It has become an annual ritual. The US Department of Defence recently released its report to Congress on China's "military and security developments", which was followed by Beijing's comment that it overstated the "so-called Chinese military threat".
In the US, the Pentagon report is touted by the media as another reminder of China's military assertiveness. In this narrative, China's military spending is soaring, whereas in the West, austerity policies are forcing drastic cuts.
In the mainland, a parallel debate tends to focus on the ulterior motives of the US pivot to Asia.
But how valid is the narrative?
As far as the Pentagon is concerned, China is pursuing a long-term, comprehensive military modernisation. A central aspect of the modernisation, so it is argued, is preparing for potential conflict in the Taiwan Strait, and contingencies in the South and East China Seas.
More recently, the Pentagon has stressed China's military investments "for a range of missions beyond China's coast", including sea-lane security, counter-piracy, peacekeeping, and humanitarian assistance and disaster relief.
Today, China and the US, the world's two largest military powers, operate in intimate regional proximity.
According to data by the Stockholm International Peace Research Institute (Sipri), US military spending declined by 7.8 per cent in real terms in 2013. Almost half of the fall is accounted for by the reduction of overseas military operations, mainly in Afghanistan and Iraq. Meanwhile, China's spending increased by 7.4 per cent in real terms in the past year.
In terms of relative growth, then, Chinese expenditure increased more than US spending shrank.
And yet, despite heightened tensions in the region, the data suggests that there have been no trend changes in Chinese military spending. Instead, the latter represents a long-term policy of rising military investment in line with economic growth.
Now, let's move from relative percentage points to absolute figures. In these terms, US military spending took a US$44 billion nominal fall in 2013, to US$640 billion. Meanwhile, Chinese expenditure grew to US$188 billion, according to Sipri. In terms of absolute growth, then, Chinese military expenditure is less than a third of America's.
Global military expenditure exceeded US$1.7 trillion in 2013. Nevertheless, US military expenditure remains about the same as the next nine nations' military expenditure - that is, the combined spending of China, Russia, Saudi Arabia, France, Britain, Germany, Japan, India and South Korea.
Indeed, China's military spending as a share of its economy is 2 per cent; roughly half that of the US (3.8 per cent).
The Chinese figure is also lower than those of its regional peers, including South Korea (2.8 per cent), not to mention regional heavy spenders such as North Korea (25-33 per cent), Myanmar (4.5 per cent) and Singapore (3.4 per cent).
But even these figures portray a flawed picture. Just as we understand living standards on the basis of gross domestic product relative to the population, military spending should be understood on a per capita basis.
In 2012, America's population stood at 314 million. So, America spent more than US$2,000 in military expenditure per capita. In contrast, China's population is over four times larger, about 1.35 billion in 2012. Consequently, its comparable figure was US$140. On a per capita basis, then, Chinese military spending is about 7 per cent of America's.
Compared to China, the growth of US military spending is stagnating, but its absolute military might remains overwhelming.
In view of global spending, US military expenditure accounts for 37 per cent of the world total, even though American GDP is barely 22 per cent of the world economy. In contrast, China invests in military spending as much as its share of the world economy - about 11 per cent.
Since its economic reforms, China has pursued military modernisation. This effort has been a reflection of its rapid economic growth. In contrast, America's military expenditure continues to be hugely disproportionate relative to its role in the world.
The secret of China's growing military might is in the size of its population, not in its military assertiveness.
In turn, the staying power of the US military is not in the size of its economy or its population, but in its massive military commitments, which are unsustainable.
What is not needed is ever higher military spending, but increasing defence cooperation between major advanced and large emerging economies - especially between Washington and Beijing.
Dr Dan Steinbock is research director of international business at India China and America Institute (US) and visiting fellow at Shanghai Institutes for International Studies (China) and the EU Centre (Singapore). See also: www.differencegroup.net


Shooting down America's claims of 'soaring' Chinese military spending

PLA soldiers taking part in a march. China has in recent years increased its military investment in line with economic growth. Photo: EPA

Opinion

Dan Steinbock says a review of the data shows the US is the one spending beyond its means


It has become an annual ritual. The US Department of Defence recently released its report to Congress on China's "military and security developments", which was followed by Beijing's comment that it overstated the "so-called Chinese military threat".


Shooting down America's claims of 'soaring' Chinese military spending

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Dan Steinbock says a review of the data shows the US is the one spending beyond its means

Dan Steinbock says a review of the data shows the US is the one spending beyond its means