China’s ever increasing defence budget

Harsha Kakar
China last week released its annual budget as part of its National People’s Conference, the country’s rubber-stamp legislature. There was an increase of 7.2 percent for defence over the previous year. Defence expenditure has witnessed a steady rise since Xi Jinping became President of the country in 2013. The budget rose from 720 billion Yuan in 2013 to 1.67 trillion Yuan (USD 230 Billion plus) this year. The Chinese defence share of the budget remains 1.3% of its overall GDP.India may be the world’s third largest spender on defence, after the US and China, but in comparison its defence budget is USD 75 Billion, one-third of China.
In addition, for the first time China avoided mentioning ‘peaceful reunification of Taiwan,’ in its discussions, though its report stated, ‘will promote the peaceful development of cross-strait relations.’ It indicated that China’s emphasis remains reunification of Tibet. As always, the Chinese defence budget did not give any breakdown of expenditure allocation, mentioning only that funds will be ‘evenly distributed amongst the three broad categories: equipment procurement, personnel and training and maintenance.’
Writing for the Global Times, China’s mouthpiece, Liu Xuanzun, a defence reporter, states, ‘a strong Chinese military supported by a sufficient defence budget serves as a stabilizing factor, as it contributes to peace and stability by deterring security threats in the Asia-Pacific region and contributing to the global balance of power.’ Liu added that China’s spending is far lower than the US ‘whether as a percentage of GDP, or in terms of per capita and per-serviceperson.’ For the world, autocratic China remains a threat due to its aggressive policies, while for China, its interest remains countering US military power.
Liu also listed threats in the South China Sea, especially the Philippines. It projected Japan as ‘showing worrying signs of a revival of its right-wing militarism by breaking away from its post-war self-defence-only principle and boosting its offensive capabilities.’ The Chinese perception is that the US is instigating nations to challenge it in the South and East China Sea. It does appear that China considers the Indo-Pacific as a greater threat than its land frontiers with India.
Japan believes China’s expanding military power is ‘a matter of serious concern’ for the global community. An article in the Japan Times highlighted that Chinese official budget figures ‘do not account for a number of military-related outlays, including some defence R&D, aspects of China’s space program, defence mobilization funds and paramilitary units.’
The Stockholm International Peace Research Institute estimated in 2022 that China’s actual defence budget was 27% higher than what was officially mentioned. As expected, all China’s neighbours, including India, have noted that an increased budget indicates that Chinese aggressiveness would continue.
There is also a belief that China projected a substantial increase in defence spending, despite its poor economy, conveying that Xi is determined to ensure that the PLA develops capabilities essential to ‘fight and win wars.’ It is also intended to send the message that China will not bow to pressures.Further it appears to be in tune with Xi’s ambition of making the PLA capable of reuniting Taiwan by 2027, its centennial year.
China daily, countering global criticism on its increased defence budget mentioned, ‘it’s quite absurd for these reports (criticism of China’s defence budget) to consistently overlook the fact that China’s increased military budget aligns with its expanding national strength, and China contributes a lot to global peace.’ The reality is that Chinese aggression enhances tensions in the Indo-Pacific as also along the LAC with India.
What also came about, for the first time in decades, was cancellation of the Chinese premier’s traditional post-parliament press interaction. While officially this implies that China is moving back into an era of isolation, the reality is that China is facing its most serious economic challenge in recent times.
Investors are fleeing, FDI is reduced to half, unemployment is 22 percent and the economy is stagnating. Simultaneously, the west is looking at delinking global supply chains from China and shifting manufacturing to other parts of the globe. In this deteriorating economic scenario, increasing seven plus percent on defence is illogical. Commenting on it would confirm that Xi Jinping’s economic policies have failed, something unacceptable to the dictator.
China’s defence budget is three times that of India, however, due to its aggressive policies, its threats are greater. China is facing tensions on all its fronts, India along the LAC and Taiwan’s growing determination to remain independent. Japan, Vietnam and the Philippines, backed by the US, refuse to accede to Chinese claims in the South and East China Seas. Nowhere in any media network, Chinese, East Asian or western, was tensions with India mentioned as one of the causes for expansion of the budget. However, these would remain and possibly grow as Chinese military capabilities enhance.
Chinese projections into India’s backyard continue unabated. It is attempting to enlarge its influence in Nepal and Sri Lanka while signing an accord to provide non-lethal weapons as also military training to the Maldivian forces. It forays into Bhutanese territory, while pushing for a border agreement in its favour. All this while, it refuses to disengage along the LAC, simultaneously enhancing its infrastructure, including communication arteries and airfields.
Apart from providing Pak with submarines and warships to enhance their capabilities against India, the PLA Navy is expanding rapidly. It is a matter of time before it begins projecting its power in the Indian Ocean. With additional airfields and enhanced troops deployment close to the LAC, the Chinese threat will always exist. India not being a part of any bilateral or trilateral agreement implies it must enhance its own capabilities to meet its challenges.
While India cannot spend as much as China on defence, nor are its threats at the Chinese level, it would however need to reorient its defence expenditure. There is a requirement to enhance funds for capability and capacity enhancement, while reducing revenue expenditure. The priority is to reduce gaps with China in almost all domains of warfare. Simultaneously India has to enhance infrastructure along the LAC.India is moving in the right direction but cannot let its guard down. The Chinese threat is here to stay.
The author is Major General (Retd)