China to increase defence spending by 6.6 per cent this year, slight drop from last year's 7.5 per cent

Military delegates arrive to the Great Hall of the People before the opening session of the National People's Congress on May 22, 2020.
Military delegates arrive to the Great Hall of the People before the opening session of the National People's Congress on May 22, 2020.PHOTO: REUTERS

China's defence spending is set to increase at a slower rate this year, as Beijing grapples with the economic impact of the coronavirus pandemic.

Military spending will go up by 6.6 per cent to 1.27 trillion yuan (S$253 billion), a slightly slower increase compared to last year's 7.5 per cent, according to figures from China's Budget released on Friday (May 22).

The numbers, announced each year at the opening of China's annual legislative meetings known as the Two Sessions, are closely watched as a barometer for how Beijing will expand its military capabilities.

Chinese Premier Li Keqiang said in his work report on Friday (May 22) that Beijing would continue to strengthen its armed forces, which safeguards "China's sovereignty, security, and development interests".

"We will deepen reforms in national defence and the military, increase our logistic and equipment support capacity, and promote innovative development of defence-related science and technology," he told almost 2,900 lawmakers at the Great Hall of the People in the Chinese capital.

The meetings, which are usually held in March, were pushed back to May this year because of the coronavirus outbreak.

In its Budget report on Friday, the Finance Ministry highlighted the importance of having a modernised armed forces, saying this was necessary to "better serve the overall interests of the Party and the country".

"We will support defence and military modernisation with priority for ensuring national defence spending," said the report.

In recent years, Beijing's People's Liberation Army (PLA) has grown its arsenal to include modern weapons, including aircraft carriers, stealth fighters and hypersonic weapons.

 
 

S. Rajaratnam School of International Studies associate research fellow James Char said the slowing growth of military spending should not have a big impact on the PLA's modernisation push over the near to medium term

"But if such a trend continues on a long-term basis, this will certainly have an emasculatory effect on the PLA's future progress," he said.

This year's 6.6 per cent increase is the lowest since growth in China's defence spending dropped to the single digits in 2016, following a near-unbroken streak of double-digit increases over more than two decades.

Professor Zhu Feng, director of Nanjing University's Institute of International Studies, said the slower rate of growth was "absolutely necessary" if the country is to deal with the grave economic impact from the pandemic - China's GDP slipped 6.8 per cent in the first quarter of this year.

Prof Zhu also pointed out that this year's projected military spending sends a positive signal at a time when Sino-US ties are tense and deteriorating.

"If there is a large increase in military spending at this time, it will seem like China has a very aggressive attitude, and it will not be beneficial to its international image," he said.