28 Juli 2010

China's 2010 Military Spending 1.5 Times Larger Than Defense Budget

28 Juli 2010

China's naval fleet (photo : keypublishing)

BEIJING — China’s military spending will total 788.0 billion yuan, or 10.2 trillion yen, in 2010, about 1.5 times higher than the country’s 2010 defense budget unveiled in March, Chinese military sources said Thursday.

Citing an internal report of the People’s Liberation Army, the sources said China’s military expenditures are expected to double to 1.41 trillion yuan in 2020 and triple to 2.30 trillion yuan in 2030, bolstering the view that the country’s military expansion is likely to continue.

The report forecasts the spending will further increase to about 5 trillion yuan in 2050, according to the sources.

China is believed to be allocating a growing share of military expenditures to boosting its navy and air force, such as building aircraft carriers in an effort to gain a leading military position in Asia.

China’s defense budget does not include outlays for research and development of weapons, leading other countries to suspect that actual spending is larger than the announced level.

The PLA report, which features the military’s logistic operation, was compiled last fall by a senior PLA officer who teaches at the PLA National Defense University.

The forecast is based on the assumption that China’s gross domestic product will grow at 6% a year on average from 2010 to 2020, 5% from 2021 to 2030 and around 4% from 2031 to 2050.

China’s GDP is expected to grow more than 9% in 2010, higher than the assumed rate, so military spending this year could become higher than the forecast.

The sources quoted the report as saying that China’s military expenditures account for about 2.5% of GDP.

But official data show that the country’s defense spending has accounted for 1.4% of GDP in recent years.

The gap shows the PLA appears to have a concept of ‘‘military spending,’’ which is different from—and larger than—a defense budget.

The sources said military spending represents the defense budget plus military-related outlays for the Ministry of Industry and Information Technology and other organs under the State Council.

Some countries and territories have questioned that the defense budget alone may have been insufficient for China to develop its latest jet fighter models and deploy nuclear-powered submarines.

But the existence of military spending can explain China’s recent moves to build carriers, military experts said.

One expert estimates China’s military spending will reach $740 billion in 2050 based on the current exchange rate, which, if the yuan strengthens against the dollar, may exceed the U.S. level and become the world’s largest.

A Chinese military source said Beijing does not seek to become a global military power, but ‘‘a major regional power that influences the world.’‘

‘‘It is early for China to bear responsibility for the world’’ in terms ensuring global security, the source said. ‘‘Such a move would diffuse China’s strategic resources.’‘

The source said it is vital for China to ‘‘develop its sea power’’ in a bid to become a major regional power, suggesting that Beijing plans to increase spending on its navy and air force to expand their presence in the East China Sea and South China Sea, gateways to the Pacific.

On March 4, Li Zhaoxing, spokesman for China’s parliament, the National People’s Congress, said the country’s defense spending would total 532.1 billion yuan in the fiscal 2010 budget, up 7.5% from a year earlier.

But the U.S. State Department suspects that China’s defense spending would be twice to three times larger than the announced amount.

(Japan Today)

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