China’s Defence Budget

10 Apr, 2002    ·   727

Satyajit Mohanty analyses the implication of increased Chinese military budget for India and the Asia Pacific
Satyajit Mohanty
The global conflict dynamics in the Asia-Pacific regional security system will largely depend on how China formulates its military and economic doctrines in the 21st century. One of the indicators of China ’s strategic calculations is its defence budget. The 2002-03 Defence Budget of 25.2 billion yuan (US$ 3.04b) signifies a 17.6 percent hike over the defence budget of 2001-02, which was 17.4 percent more than the budget of 2000-01.

 

 

China ’s military spending will be high throughout this decade due to three basic reasons. Firstly, China ’s strategic doctrines and threat perceptions have undergone a paradigmatic change after the Cold War. Secondly, high rates of economic growth will support increasing military expenditure, enabling China to increase its zonghe guoli or Comprehensive National Power. Finally, China believes that its defence budget is much less than other countries in world. 

 

 

Discounting arguments of a China threat, China has justified the hike in its defence budget stating that the increase is for maintenance of army personnel and military equipment to ensure that the army’s defensive combat capabilities are not jeopardized. The Chinese assert that China ’s defence budget is miniscule when compared to the US defence budget of $379 billion and only about 30 percent of Japan ’s defence budget. The increase in the US defence budget of $48 billion this year is higher than the defence budget of the next highest spender in the world viz., Russia . The Chinese Defence White Paper of 2000 asserted that China ’s per capita defence expenditure and the defence-GDP ratio of 1.31 percent is one of the lowest in the world, whereas it is 3 percent and 2.7 percent for US and India respectively. China has registered tremendous economic growth in recent years and its economy has quadrupled in the last two decades providing the wherewithal for higher defence spending. China is facing what Stuart Harris and Andrew Mack call an “economic-security dilemma”, where the proclivity for war may not decline with economic growth. On the contrary, the economic upturn might get diverted towards defence spending, which, according to scholars like Paul Kennedy, has heralded the rise of new great powers. 

 

 

However, China ’s defence budget suppresses the real situation on many counts. Firstly, it does not include the proceeds from defence sales. Pakistan and Myanmar are among the largest buyers of weapons from China . Secondly, it does not include major weapons acquisitions funded by other budget heads. The Gulf War made China realize the implication of the Revolution in Military Affairs. Since the last decade China is importing both technology and weapons from countries like Russia , Israel and France to improve its force projection capabilities. Thirdly, R&D expenses on military and nuclear technology form a component of the Ministry of Energy budget. Finally, a good part of China ’s defence development depends on civilian funding, not reflected in its defence budgets. Hence, even by conservative estimates, China ’s actual defence budget would increase by a multiple of three or even more if the Purchasing Power Parity (PPP) measure is used.   

 

 

China ’s post-Cold War threat perceptions have also undergone a paradigmatic shift. Earlier, the threats emanated from across China ’s land borders and a protracted “People’s War” formed the basis of its military strategy. Currently, China ’s security concerns arise from the East and Southeast Asia . China views the US presence in the Pacific, its renewed security and defence treaties with countries like Japan , South Korea and the Philippines , and its NMD plans as a “cordon sanitaire” to contain China . To stake its claims in the South China Sea , protect its vital coastal and offshore resources and possess a regional clout, China requires military equipment to provide force projection capabilities. The need to develop strong blue water navy and maritime assets will force China to keep its military spending high throughout this decade.  

 

 

China ’s military modernization has tremendous policy implications for India . India cannot match the defence developments in China . However, it should upgrade its deterrent capabilities and naval power to ward off the Chinese threat particularly in the Bay of Bengal . China is the status quo power as far as Sino-Indian relations are concerned and this equation is unlikely to be disturbed in the near future. Engaging China in the political arena, forging economic and cultural ties, promoting Confidence and Security Building Measures (CSBMs), establishing Joint Working Groups (JWGs) to articulate a common stand on WTO issues, terrorism etc., will be to India ’s benefit.

 

 

India should promote a dense web of bilateral and multilateral relationships and institutions in South and Southeast Asia to prevent countries bandwagoning with China to increase its diplomatic and military leverage against India . Finally, India needs to establish a qualitatively new level of ties with the US , Japan and Russia to ensure that it's strategic and security imperatives are not prejudiced by China . 

 

 

 

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