The China Threat

As U.S. cuts, China’s defense budget to top $100 billion this year

March 5, 2012

China’s communist government on Sunday announced that its defense spending for 2012 will surpass $100 billion for the first time.

The official figure of $106.4 billion (Chinese Yuan 670 billion) was made public during the National People’s Congress session in Beijing, the annual Communist Party gathering of officials from around the country.

The funding is going to an array of advanced weapons and military capabilities that have alarmed states in the region as well as the United States. They are concerned that China is preparing to use its military power for both coercion and a future conflict.

China’s new weapons include large numbers of submarines, warships, and aircraft, with a special emphasis on missiles. New missile systems being deployed include four new types of long-range nuclear missiles: The road-mobile DF-31 and DF-31A ballistic missiles; a new DH-10 land-attack cruise missile; and the JL-2, a submarine-launched version of the DF-31.

Additionally, the Pentagon is worried about China’s new DF-21D anti-ship ballistic missile, a unique long-range missile that is in the early stages of deployment. The precision-guided missile is accurate enough to hit U.S. aircraft carriers at sea.

China is also close to deploying its first aircraft carrier, the rebuilt Soviet-era carrier Varyag, and has at least two other carriers under construction, according to U.S. defense officials.

Other strategic capabilities in China’s arsenal are anti-satellite missiles that can destroy communications, navigation, and targeting satellites in orbit, as well as missile defenses and cyber warfare capabilities.

China’s cyber warfare efforts have included large-scale global intrusions into both government and private networks to steal data and plant clandestine computer software that can disable or take control of networks.

The official figure for Chinese defense spending is considered by the Pentagon and other non-government specialists to be far lower than actual spending, which has been estimated to be at least $160 billion and as high as $250 billion a year.

China in the past dismissed concerns about its military buildup as the work of anti-communist, Cold War critics. Beijing also has pointed out that U.S. defense spending is far larger than China’s. The recent U.S. defense budget request for 2013 was $524.4 billion.

However, China specialists say the two nations’ spending on defense is different since the United States has global responsibilities to defend friends and allies abroad such as Japan and Europe.

China’s forces, by contrast, are not a national army but military forces controlled by the ruling Communist Party of China. The main mission of the Chinese military is to keep the Party in power, not to protect the nation from external threats.

The increase represents an 11.2 percent boost in defense spending from last year and follows double-digit increases that have been devoted to the military for more than a decade, according to Li Zhaoxing, a spokesman for the People’s Congress session.

Li released the figures to the state-run Xinhua on Sunday. He stated that Beijing coordinates its defense development with economic development.

The government "sets the country's defense spending according to the requirement of national defense and the level of economic development," Li said.

Last year, China announced a 12.7 percent increase in defense spending to about $91.5 billion. The boost "continues more than two decades of sustained annual increases in China’s announced military budget," the Pentagon said in August.

The Pentagon’s annual report on the Chinese military stated that China actually spent more than $160 billion in 2010, noting that Chinese military secrecy makes estimates difficult.

"Moreover, China’s published military budget does not include major categories of expenditure, such as foreign procurement," the Pentagon stated in its report.

Additionally, the Chinese defense budget does not include the space program, which is run entirely by the military and is used for both military and civilian goals.

China’s ambitious space program—which includes anti-satellite weapons, imagery and communications satellites, a global network of monitoring stations, and numerous unmanned and manned space launches—is estimated to consume tens of billions of dollars in additional funds for the military that are not included in the annual official budget figure.

Richard Fisher, a China military analyst at the International Assessment and Strategy Center, said this is a "colossal" increase compared to other defense budgets in Asia.

"Such growth is likely to continue as many new programs enter their expensive production phase, including up to four aircraft carriers, six to 12 new amphibious assault ships, a new C-17-size military transport, one or more 5th generation fighters, a third generation nuclear attack submarine plus new nuclear missiles, space warfare systems, and a significant increase in ground force firepower," Fisher said.

The London-based defense analysis group IHS Jane’s reported February 14 that China’s defense budget will reach $238.2 billion by 2015, double current spending and more than the combined defense budgets for all governments in the Asia Pacific region.

It noted that the figure was four times Japan’s defense budget, the next largest economy after China.

"China’s [military] investment will race ahead at an eye-watering 18.75 percent, leaving Japan and India far behind," said Paul Burton, senior principal analyst, IHS Jane’s Defence Budgets. "But this isn’t a three horse race. Taiwan’s rate of investment means it will have overtaken Singapore in terms of defense spending by 2015, while Vietnam and Indonesia are also forecast to increase defense spending at a rate that exceeds GDP growth."

Sarah McDowall, an Asia specialist with IHS Jane’s, said the Chinese military spending increases for 2012 are driven by several factors, including Beijing’s response to the announced U.S. military buildup in Asia.

It reflects a long-term military buildup that seeks advanced forces for defending "core territorial and maritime interests," McDowall said.

"It is important to note that Beijing views itself as reacting to the increasingly assertive policies of other countries and has repeatedly said that it does not want to provoke military confrontation," McDowell said. "That said, the increase will be partially motivated by Washington’s strategic campaign to re-assert itself in Asia Pacific and will underscore China’s growing means to assert its power over maritime claims in disputed waters of the South China Sea, East China Sea, and Yellow Sea."

The Obama administration announced in November that as U.S. forces draw down from Iraq and Afghanistan, military forces will be bolstered in the Asia Pacific region.

The Pentagon is building up military forces on Guam, sending 2,500 Marines at a base in northern Australia, and dispatching new Littoral Combat Ships to Singapore as part of its buildup.

Additionally, the Pentagon has launched a new Air Sea Battle Concept designed to counter China’s military, specifically weapons the Pentagon calls "anti-access, area-denial" arms—submarines, warships, aircraft, missiles, and cyber weapons.