Beijing and Washington’s Defense Budgets: A Tale of Two Cities

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Beijing released its defense budget for 2014 today, as a draft budget was submitted to the National People’s Congress for review. Xinhua reported that the new budget called for a 12.2 percent increase, raising defense spending to 808.2 billion yuan ($132 billion). Outside of China, analysts and reporters viewed this increase with suspicion. “China’s Xi ramps up military spending in face of worried region,” a Reuters headline read. The article cited unease within Japan and Taiwan over a lack of transparency on how the money will be used.

Meanwhile, at the end of the February the Pentagon released its spending proposal, which called for cut-backs that would reduce the Army to between 440,000 and 450,000 troops (down from a peak of 570,000 in the post-9/11 period). News outlets across the country screamed variations of the New York Times’ headline:  “Pentagon Plans to Shrink Army to Pre-World War II Level.”

The official Pentagon budget, released yesterday, called for $496 billion in spending, keeping the budget effectively static. Over the course of the five-year budget plan, however, the Pentagon actually seeks $115 billion more than was allocated for it by the 2011 Budget Control Act. The fiscal year 2015 budget in particular “seeks to repair the damage caused by the deep spending cuts imposed by sequestration,” according to an article on the Defense Department’s website.  

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The timing of Beijing and Washington’s defense budgets practically begs analysts to make comparisons—particularly since China and the U.S. seem locked in a long-term strategic battle for dominance in the Asia-Pacific region. The two defense budgets reinforce a narrative that suggests U.S. dominance is slipping in the face of a rising China: China raises its budget by double-digits while the U.S. undergoes painful cuts. As Zach wrote yesterday, spending cuts in the U.S. military particularly call into question America’s ability to finance the pivot to Asia.

The budgets also have different priorities for spending. Sun Huangtian, the deputy head of the general logistics department of the People’s Liberation Army, told Xinhua that the defense funds “will be spent mainly on modernizing the army’s weapons and equipment, improving living and working conditions for service personnel, and updating the army’s management system.” Chinese officials and academics cited in the article all agreed that an increase in spending was necessary due to external security challenges facing China, presumably including its territorial disputes in the East and South China Seas as well as a long-term strategic competition with the U.S.

Foreign Ministry Spokesman Qin Gang told the press that that China’s defense policy “is defensive in nature” and that spending increases were necessitated by China’s size and the geopolitical environment. “Some outside China hopes to see China stay as a boy scout and never grow up,” Qin said. “If that is the case, who will ensure our national security and how can the world peace be upheld? If that is the case, will China be tranquil, the region stable and the world peaceful?”

A spokesperson for the National People’s Congress was even more direct: “Based on our history and experience, we believe that peace can only be maintained by strength,” she told journalists.

Meanwhile, the U.S. budget focuses more on streamlining the armed forces as America transitions away from the war in Afghanistan. In a statement, Hagel said that the FY2015 budget and the new Quadrennial Defense Review explain “how we will adapt, reshape, and rebalance our military for the challenges and opportunities of the future.” Yet while Hagel and other DoD officials seem optimistic that the 2015 budget will allow them to do their jobs, they warned of disaster should another round of sequestration cuts take place in 2016. Assistant Secretary of Defense for Acquisition Katrina McFarland told a conference that further sequestration would result in a “hollow force,” as the DoD could not reduce troop numbers fast enough to be able to “preserve the integrity” of the armed forces. (Her alleged remarks that the pivot to Asia “can’t happen” may have been made in this context).

Hagel’s statement also warned that “continued sequestration requires dangerous reductions to readiness and modernization.” Such reductions, he said, “would put at risk America’s traditional role as a guarantor of global security.”

The defense budgets released by Beijing and Washington share few similarities, but they do have one thing in common: spokespeople claiming that their increased military spending is good for “global security” or “world peace.” On a global level, and more particularly on a regional one, both the U.S. and China are convinced that security can be achieved through an increased military presence.

China believes that the U.S. is pursuing a policy of containment, egging on its friends and allies in the region to challenge China over territorial disputes. Many top-level academics in China worry that U.S. support for Japan and the Philippines in particular has encouraged these two nations to directly challenge China, thus worsening the security environment. Accordingly, China is forced to build up its military to defend its claims, and also to discourage provocation by its neighbors.

The U.S., however, thinks recent actions by Japan and the Philippines are a natural response to what is viewed as increased Chinese aggression. Under this line of thinking, a more robust U.S. military presence in the region is taken as a positive contributor to regional security, because it would reassure countries that are increasingly nervous about China’s strength.

It’s a classic question of the chicken vs the egg: which came first, China’s aggression or U.S. containment?

Regardless of who is blamed for starting the cycle, it’s hard to deny that China and the U.S. are locked into a low-key (for now) arms race, where military spending by one side is used to justify defense budget increases by the other. But already, given the divergent trends in spending, some in the region are wondering how long the U.S. will be willing or able to match China’s investment in a regional military presence. Though the announced Chinese military budget is less than 27 percent of the U.S. budget, it’s safe to assume that close to 100 percent of China’s budget will be focused on upping Chinese readiness in the Asia-Pacific region. With a variety of global security concerns, the U.S. cannot make the same claim.

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