Military budget of China

Chinas military budget 1999-2008.

The military budget of the People's Republic of China (PRC) is the portion of the overall budget of China that is allocated for the funding of the military of the People's Republic of China. This military budget finances employee salaries and training costs, the maintenance of equipment and facilities, support of new or ongoing operations, and development and procurement of new weapons, equipment, and vehicles.

Some dispute exists about the method that China uses to account for its military spending. Some categories of spending are not included in the official military budget, and as such, international bodies often attempt to estimate the Chinese military budget in terms that are comparable with other countries. These estimates are typically higher than published Chinese figures.

The Chinese government's published 2008 military budget was US$59 billion, a 17.6% increase on the previous year. This figure would mean that for 2008, China's military expenditure as a percentage of GDP would be 1.7%, with per capita expenditure of US$45. Total active duty personnel as of March 2006: 2,255,000 (army 71.0%, navy 11.3%, air force 17.7%).

Various studies

While the People's Republic of China officially states to have a lower defense budget than the other world powers, unofficial estimates place the total amount of spending higher than the government claims. However, unofficial calculations about the military spending of the People's Republic of China tends to differ between organizations.

In 2008, the US Department of Defense's annual report to Congress on China's military strength offered several estimates of actual 2007 Chinese military spending. In terms of the prevailing exchange rate, Pentagon estimates range between US$97 and US$139 billion, the second highest in the world after the US.

The last year that many international institutes provided estimates of Chinese military spending, in comparable terms, was 2003. In terms of the prevailing exchange rate, SIPRI, RAND, the CIA and the DIA estimated the budget at between US$30 and US$65 billion. In terms of purchasing power parity, or the relative purchasing strength of the expenditure, the SIPRI estimate is as high as US$140 billion. The Chinese government's published budget at that time was less than US$25 billion.

A RAND Corporation study states that People's Republic of China's defense spending is higher than the official number but lower than United States Department of Defense estimates. The defense spending of the People's Republic of China is estimated to be between 2.3-2.8% of China's GDP. This is 40-70% higher than official figures, but substantially lower than previous outside estimates. Chinese military spending nevertheless doubled between 1997 and 2003, nearly reaching the level of the United Kingdom and Japan, and it continued to grow with an annual rate of greater than 10% during 2003-2005. [2] If the RAND study is correct, China could be the second highest spender by percentage of GDP, among the countries in the below tables; as well, it would surpass Japan and Russia in absolute terms.

A SIPRI study also comes to the conclusion that the military spending of the People's Republic of China is higher than the official budget, but its estimate is lower than that of the RAND study. Of the major powers, the military spending of the People's Republic of China surpasses only that of Japan in relative terms and Russia in absolute terms. [3]

A comparison

Table 1. Absolute expenditures (in USD).(2004-2005)

Country	Official budget	SIPRI	RAND	DoD
United States	$419.3 billion	$475.3 billion	/	$419.3 billion
United Kingdom	$58.6 billion	$47.4 billion	/	/
People's Republic of China (PRC)	$29.9 billion	$30.7 billion	$42.0-51.0 billion	$63.0 billion
Japan	$45.8 billion	$42.4 billion	/	/
Russia	$14.5 billion	$19.4 billion	/	$70.0 billion
Republic of China (ROC)	$7.6 billion	/	/	/

Table 2. Relative expenditures (as percentage of GDP).

Country	Official budget	SIPRI	RAND	DoD
United States	9.6%	0.4%	/	9.6%
Russia	2.8%	4.3%	/	12%
United Kingdom	2.7%	2.2%	/	/
Republic of China (ROC)	2.6%	/	/	/
People's Republic of China (PRC)	1.4%	1.8%	1.9-2.4%	1.2%
Japan	1.0%	1.0%	/	/

• Data: Official: 2005; SIPRI: 2005 (overall) 2004 (% of GDP); RAND: 2004; DoD: 2005, except the data for the U.S. which is a 2006 estimate.

• Note that this data have been adapted to the revision of China's 2004 GDP. This revision increased China's GDP number with 16.8% (or 283 billion USD). These figures were issued by the Chinese National Bureau of Statistics following a survey that aimed to gather more accurate data. Service industries accounted for 93% of the revision. [4]

• 2007 military budget is 350.92bn yuan, only an increase of 4.1 yuan per capita.

Real Volume Comparison

• The following table exposes the effects of Purchasing Power Parity by comparing the equipment that each country can afford with its budget. The data, except for the "troops" category, shows only relatively modern and on use material each military owns, it excludes stocks and obsolete hardware.

Type	PRC	Russia	Japan	US	ROC	N. Korea
Fighter aircraft	980	2200	760-800	4500	400	~600
Tanks	2100	21000	1600-1800	19000	400-900	~4000
Submarines	40	60	38	72		24
Tank/Transportation	120	200	100	900	N.A.
Troops (in millions)	0.82	0.35	0.45	1.0		0.9*

• GDP (PPP) (2007) [5]
  • EU - $14,380 bn
  • US - $13,840 bn
  • China - $6,991 bn
  • Japan - $4,290 bn
  • India - $2,989 bn
  • Russia - $2,088 bn

Controversy and reaction

Main article: Sino-American relations

The People's Liberation Army's official military budget for 2008 is $59 billion, including money used for foreign weapons purchases, military-related research and development, and the paramilitary People's Armed Police.

In 2008, the US published estimates that showed China's military spending exceeding 139 billion USD. This is a point of contention between the US-China relations. Former United States Secretary of Defense Donald Rumsfeld has accused China several times of hiding its real military spending and expressed concern over why China would increase its military expenditure with no apparent external threats. [6] Some international observers have responded to this accusation negatively [7]in light of the US' own military expenditures which are 12 times larger than China's , and nearly 5 times larger than even the highest estimate [8], with the USA having no major external threats either since the end of the Cold War. In the subsequent year, China's budget increased 9.3% to $35 billion.

The Chinese government has publicly upheld a peaceful development strategy named "China's Peaceful Development Road." Its objectives are to claim and prove that China's economic development would not pose a threat to Western nations wary of its growth.

Main article: Foreign relations between China and Japan

Japan, a traditional ally of the United States deployed against China, also accused China of "[being]... a considerable threat." [9] This accusation, however, has often been cited as an example of the deep-seated misunderstanding and Sinophobia in traditional Asian allies of the US during the Cold War.

See also

• People's Liberation Army
• Chinese Century
• China's peaceful rise
• BRIC
• Sino-American relations
• Military budget in the United States
• List of countries by military expenditures
• List of countries and federations by military expenditures
• List of countries by size of armed forces

External links

General

1. War Resisters League - Where your income tax money really goes - 2005
2. Rand Corporation, China
3. The SIPRI Military Expenditure Database

News

1. BBC NEWS Article - China to boost military spending - March 4, 2005
2. BBC NEWS Article - Rumsfeld questions China spending - October 18, 2005
3. BBC NEWS Article - China climbs world economic table- December 20, 2005
4. BBC NEWS Article - Japan alarmed by Chinese "threat" - December 22, 2005