China boosts military spending by 6.8% this year, stable from 6.6% rise in 2020

Last year, the pandemic caused China's military spending to grow at its slowest pace since 2016.
Last year, the pandemic caused China's military spending to grow at its slowest pace since 2016.PHOTO: AFP

SINGAPORE - China is set to grow its defence spending by 6.8 per cent this year, a similar rate compared with last year's rise of 6.6 per cent amid the Covid-19 outbreak.

Defence spending this year will increase to 1.36 trillion yuan (S$280 billion), up from 1.27 trillion yuan in 2020, figures from China's Budget on Friday (March 5) showed.

China does not provide a breakdown of its defence budget as its tradition.

Its defence spending is a closely watched gauge for how the world's second-largest economy will boost its military capabilities amid its tensions with the United States and in the South China Sea.

In its Budget report on Friday, the Finance Ministry said: "We will provide stronger financial guarantees to vigorously support the modernisation of national defence and the armed forces, and help China's defence capabilities rise in step with its economic strength."

Last year, the pandemic caused China's military spending to grow at its slowest pace since 2016. This was when rates fell to the single digits following a near-unbroken streak of double-digit increases over more than two decades.

Still, Chinese naval spending, due to Beijing's territorial disputes in the South China Sea, helped drive global military spending to a record US$1.8 trillion (S$2.4 trillion) last year, according to an International Institute for Strategic Studies (IISS) report last Thursday.

China's military spending was the driving force behind growth in Asia's overall defence expenditure, accounting for 25 per cent of the continent's spending in 2020.

The world's most populous country spent about a quarter of what the US - the world's largest defence spender at US$738 billion - did last year, the report by the British think-tank said.

Chinese President Xi Jinping has sought to modernise the People's Liberation Army since he took office in 2012.

In recent years, China's armed forces has grown its arsenal to include modern weapons, including aircraft carriers, stealth fighters and hypersonic weapons.

Dr Li Nan, a visiting senior research fellow at the National University of Singapore’s East Asian Institute, said that the growth in this year’s military budget was greater than the 5 per cent boost he had anticipated.

“It’s quite an ambitious budget, given that last year’s economic growth was 2.3 per cent because of the pandemic,” Dr Li said, pointing out that last year’s 6.6 per cent boost in military spending was on the back of a 6.1 percentage growth in China’s GDP.

He said that the increase comes as China spends more in capital intensive areas such as research and development, and as the armed forces beefs up its research in cyber and space warfare, among other areas, while maintaining its operations in the South China Sea and cross-straits with Taiwan.

Recent border clashes with India might have also contributed to the larger-than-expected budget, he added.