China hikes defence budget by 10.7%

Ananth Krishnan
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Calls it good for peace and regional stability

China's first aircraft carrier Liaoning.— Photo: AFP
China's first aircraft carrier Liaoning.— Photo: AFP

China on Tuesday said it would increase its annual defence budget by 10.7 per cent to 720.168 billion Yuan ($115.7 billion), even as officials defended the increased outlay as “good for regional stability” amid on-going tensions with several neighbours.

The new defence budget — the first under the new leadership that will take over this month — is expected to be approved by the National People’s Congress (NPC) or Parliament, which opened its annual session on Tuesday morning.

The draft budget also hiked internal public security spending — which is directed towards police forces and maintainance of stability — by 8.7 percent, to 769.1 billion Yuan ($ 123.65 billion). Underscoring the seriousness with which the CPC views maintenance of public stability, internal security spending has exceeded the external defence outlay for the second straight year.

The crucial, week-long NPC session will formalise the appointment of new Communist Party of China (CPC) General Secretary Xi Jinping as the country’s next President. Second-ranked Polit Bureau Standing Committee member Li Keqiang will replace Wen Jiabao as Premier.

The planned defence budget for the coming year has been seen as an indicator of the new leadership under Mr. Xi plans to manage the country’s vast and influential military.

After taking over in November, Mr. Xi has appeared to court the People’s Liberation Army (PLA) more actively than his predecessor Hu Jintao. The 10.7 per cent hike was, however, in the same range of last year’s 11.6 per cent rise, when the budget was increased to $ 106.4 billion.

While Chinese analysts point out that this year’s $ 115.7 billion budget is still dwarfed by the $531 billion U.S. budget, the hike in spending is likely to worry China’s neighbours. For instance, the outlay is now more than three times India’s defence spending, which was last week, hiked by five per cent to $37 billion, and double Japan’s $52 billion budget.

Asked about concerns voiced by China’s neighbours, Ms. Fu, the NPC spokesperson, told reporters on Monday that China strengthening its defence “is good for stability in this region and for peace in the world”.

“Our foreign policy for peace and our defensive policy have contributed to peace in this region,” she said. “We have upheld this policy for decades and we have never wavered in this commitment.”


China’s rise in defence spending has been cited by some countries in the region, such as Japan, as a reason for their own recent hikes in military outlay. Foreign observers have also questioned the opacity in China’s accounting, although analysts say transparency is improving.

“While China’s official defence budget does not capture all defence-relevant spending, it is not exceptional in this regard,” argued Andrew S. Erickson, an Associate Professor in the Strategic Research Department at the U.S. Naval War College; and Adam Liff, a scholar at Princeton University, in a recent paper on China’s defence spending.

The paper said China’s military focus, in the short term, would be aimed at “maintaining domestic stability, preventing Taiwan from declaring independence, and asserting China’s claims in the contested Near Seas by asymmetric means”.



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