Defence spending to rise by 7.5%, slight dip from last year

Chinese military delegates arriving for the opening of the second session of the National People's Congress in Beijing yesterday.
Chinese military delegates arriving for the opening of the second session of the National People's Congress in Beijing yesterday.PHOTO: EPA-EFE

Faced witha slowing economy, China will see a slight dip in defence spending this year.

The latest Budget released yesterday showed Beijing would spend 1.19 trillion yuan (S$240 billion) on its military this year, a 7.5 per cent increase over 2018. Last year, the rise was 8.1 per cent.

The spending would "push forward defence and military modernisation across the board", said the Ministry of Finance, a reference to the unprecedented modernisation of the People's Liberation Army (PLA) that President Xi Jinping initiated after becoming commander-in-chief in 2012. Mr Xi had set the goal of achieving a world-class military by mid-century.

The world's second-largest military spender, China has been downplaying its sizeable military budget even as it pushes to acquire more high-tech weaponry like stealth fighters and aircraft carriers. On the eve of the opening of China's annual parliamentary session yesterday, when the national Budget was released, the spokesman for the National People's Congress Zhang Yesui reiterated that China had not posted double-digit increases in defence spending since 2015.

"China's limited spending in defence only aims to maintain the (country's) sovereignty, security and territorial integrity," he said.

Left unsaid was the fact that growth in defence spending has continued to outstrip GDP growth.

While it is still far behind the United States, which budgeted US$716 billion (S$971 billion) for defence this year, China spends more than twice as much as the No. 3 on the table of defence spenders - Saudi Arabia with US$82.9 billion.


Experts say China has in recent years closed the gap significantly with the US and Europe across its armed services, such as with new-generation fighter jets, naval destroyers and ballistic missiles.

Last November, state news agency Xinhua confirmed China was developing a new generation of aircraft carrier, the Type 002, which would be the nation's second homegrown carrier and its third in total.

Such a project is typically not reflected in China's annual military budget, said Taipei-based PLA expert Arthur Ding.

"China has a 'special appropriations' mechanism used for certain purposes, such as the development of specific types of weapons and projects," he said.

"That's why some in the West tend to see China's defence budget as not transparent enough."

But Beijing's efforts to stimulate its slowing economy may limit its military ambitions somewhat: yesterday, it announced tax cuts, while saying spending on basic infrastructure and industry will rise.

"Declining tax revenue and more talk of the need for belt-tightening will make it difficult for the PLA to request more money in the coming years," said Dr Ding.

A version of this article appeared in the print edition of The Straits Times on March 06, 2019, with the headline 'Defence spending to rise by 7.5%, slight dip from last year'. Print Edition | Subscribe