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China to Increase Defense Spending

Xi Jinping
Xi Jinping / AP
February 17, 2015

Chinese President Xi Jinping is expected to announce a boost in defense spending next month, even as funding for the U.S. military remains a low priority for the Obama administration.

Despite China’s shrinking economic growth, Jinping will authorize the increase to counteract the U.S. military "rebalance" to Asia and mollify defense leaders concerned about his anti-corruption campaign, Reuters reports:

While China keeps the details of its military spending secret, experts said additional funding would likely go toward beefing up the navy with anti-submarine ships and developing more aircraft carriers beyond the sole vessel in operation.

The military budget will be announced at the start of the annual meeting of China's parliament on March 5. Last year, defense spending rose 12.2 percent to $130 billion, second only to the United States.

That continued a nearly unbroken two-decade run of double-digit budget increases, although many experts think China's real defense outlays are much larger.

China's leaders have routinely sought to justify the country's military modernization by linking defense spending to rapid GDP growth. But growth of 7.4 percent last year was the slowest in 24 years, and a further slowdown to around 7 percent is expected in 2015.

An even larger Chinese defense budget could stoke more tensions and volatility in the Asia-Pacific region, where other countries are also modernizing their militaries:

Japan approved a record $42 billion military budget last month. India boosted defense spending by 12 percent for 2014-15 to $38.35 billion and military expenditure is seen rising to $40 billion in Southeast Asia in 2016.

The ramp-up in Chinese defense expenditures comes as U.S. military spending is projected to shrink in the coming years. The Congressional Budget Office (CBO) reported last month that defense spending will abate to 2.6 percent of GDP by 2025, the lowest percentage in decades and a smaller portion of spending than net interest payments. Budget cuts known as sequestration could slash $1 trillion from the U.S. defense budget in the next decade if not repealed.

Although China’s military has made significant advances in the last few decades, a recent study conducted by the Rand Corporation found that the People’s Liberation Army (PLA) still suffers from poor command structures, weak personnel, and corruption.

Published under: China