By Shannon Tiezzi
The rapid growth in China’s defense budget is a natural outcome of its economic rise.
IHS Jane’s recently estimated that China will raise its military budget by nearly $10 billion this year (going from $139.2 billion to $148 billion). The news fits in well with catchy headlines about China’s growing military might, but as with all figures, the meaning can be distorted when taken out of context.
One fact that is well-known among defense thinkers (but often over-looked by the media) is that China’s military spending is increasing in overall terms, but not as a percent of China’s GDP. In fact, when measured a percent of GDP, China’s defense budget has actually declined slightly over the past four years, from 2.2 percent in 2009 to 2 percent in 2012, according to the World Bank. For the last 10 years, China’s military budget as percent of GDP has hovered at or close to the 2 percent line. To add some context, the United States’ defense budget as percent of GDP has climbed during the same period, growing from 3.6 percent in 2003 to 4.2 percent in 2012. The U.S. Central Intelligence Agency’s “World Factbook” gives very similar figures, as does the Stockholm International Peace Research Institute.
In other words, China’s military budget increase is solely a function of its overall economic growth. With an average annual GDP growth of nearly 10 percent since 2000, government budgets in China have naturally increased across the board. From a strategic standpoint, it would make no sense for the Chinese government to keep military spending static while all other areas of spending increase. If China had frozen its military spending at 2009 levels, for example, that budget (reported at $70 billion) would be a paltry 0.7 percent of China’s GDP today ($9.4 trillion in 2013, according to China’s official GDP figures), putting China on a level with Madagascar and Sierra Leone.
Read the full story at The Diplomat