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China’s Military Spending

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New Leaders Forum

China’s Military Spending

The US share of global military spending has hit 43 percent. Despite double-digit hikes, China still lags far behind.

The Stockholm International Peace Research Institute (SIPRI) has released its annual update of world military expenditure. In 2010, global spending was estimated at $1,630 billion, an increase of 1.3 percent over the previous year. According to SIPRI, this has been the smallest annual growth rate since 2001, primarily because of the global financial crisis.

The United States continues to lead the spenders, with its share of global military expenditure rising to an astonishing 43 percent. The four other permanent members of the United Nations Security Council remain a significant distance behind, with China coming second with 7 percent, followed by Britain, France, and Russia with around 4 percent.

China’s numbers are particularly interesting. Despite the talk of China’s rising military prowess, and the country hosting the world’s largest army, with as many as 2.25 million active soldiers, its  military expenditure is still far behind that of the United States.

The main reason is obvious: unlike the United States, China participates in very few international peacekeeping missions or military interventions, and doesn’t boast hundreds of military bases around the world. Instead, the People’s Liberation Army has largely limited its activities to national and, on a few occasions, regional operations.

Still, over the past 20 years, China’s estimated annual defence spending has increased steadily from $17 billion in 1990 to $114 billion in 2010. In March, the government announced a further boost in military expenditure, by almost 13 percent for the year.

According to official statements, the focus will be on pay rises for soldiers, as well as the modernization of equipment and weapons. But this further double-digit rise also suggests that China is increasingly willing to step up as a potential rival to the United States.

Until it’s ready to do so, the primary focus for China is likely to be the Asia region, and one way for it to help shift the balance of power in its favour would be to boost its participation in peacekeeping and peace enforcement missions, something that will necessitate even bigger boosts to military spending.

Currently, China’s annual military expenditure is about 2.2 percent of GDP, compared with the United States’ 4.7 percent. In real terms, this represents a difference in spending of $427 billion, meaning that even if China were to double its GDP expenditure on defence spending, it would only equal a third of US defence spending.

The raw numbers underscore the extent to which becoming the world’s premier military power is still a distant goal for China. In the meantime, it will have to continue exploring alternative avenues for rivalling the United States, whether militarily or diplomatically.