Increase in China’s defence spending likely to unnerve neighbours

[haidian]

Increase in China’s defence spending likely to unnerve neighbours
PUBLISHED: 1 HOUR 8 MINUTES AGO | UPDATE: 1 HOUR 2 MINUTES AGO
LISA MURRAY AFR correspondent

China’s military spending is expected to reach almost $US160 billion ($183 billion) next year, more than the defence budgets of Britain, France and Germany combined, according to a new report.

The forecast is contained in an annual review of global defence budgets by consultant IHS Jane’s and is likely to unnerve China’s neighbours as Beijing becomes more assertive in territorial disputes across the East and South China seas.

China’s military build-up, together with fast-growing budgets in the Middle East, will push overall global defence spending up this year for the first time since 2009. Still, China’s spending in 2013, at $US139 billion, was less than a quarter of the United States’ defence budget. And Paul Burton, IHS Jane’s director for Aerospace, Defence and Security, says it has actually fallen as a percentage of GDP to 1.46 per cent from 1.63 per cent five years ago.

“The increase in the Chinese spending should largely been seen as creating a defence budget which is commensurate with a rising global economic and geopolitical power rather than as a sign of belligerence,” he said in a written response to questions.

“There is, of course, the valid concern that the scale and pace of the increase in defence spending will create a level of instability due to mistrust among neighbouring nations and that to some extent appears to be spurring increase of spending elsewhere in the region.”

TERRITORIAL DISPUTES


China is locked in territorial disputes with Japan in the East China Sea and the Philippines, Vietnam, Malaysia, Brunei and Taiwan in the South China Sea. In recent years, the government has outlined its ambitions to become a maritime power.

Last August, President Xi Jinping inspected the country’s sole aircraft carrier, the Liaoning, a Soviet-era ship, which has begun training missions after being bought from the Ukraine 15 years ago and refitted in China.

A Communist Party official reportedly said last month that a second aircraft carrier is being built in the northern city of Dalian. Its construction is expected to take six years and China is aiming to have at least four such carriers, according to Wang Min, the party chief of Liaoning province.

Mr Burton said wage pressures have also affected Beijing’s defence budget as the pay of around 2 million military personnel has gradually increased over the past five years. He expects the modernisation requirements of the People’s Liberation Army will mean “robust growth in defence spending is maintained”. The numbers of personnel may decrease as resources are reallocated toward higher levels of technological capability.

“The process of turning the PLA into a truly modern fighting force remains a long-term project,” he said.

China’s spending is up from $US111.6 billion in 2009. The government will release its official budget in March, which is likely to be smaller than the IHS Jane’s figures because it doesn’t include all research and development costs.

Increase in China’s defence spending likely to unnerve neighbours

 

[Chinese-Dragon]

We spend so little in terms of GDP percentage!

Imagine if we spent 5% of GDP on our military budget like America and Russia are currently doing.

Neighbors have nothing to worry about when we are spending such a low percentage of GDP.

 

[haidian]

Yes,China's GDP percentage for defense budget is among the lowest in the world. It looks huge is just because China's GDP is huge.

 

[sixth]

surely a stronger china will benefit it's friends and allies.
who will scare and worry when china is getting militarily stronger?
of course china's enemy.
so, when China Increase it ’s defence spending,
china's friends and allies will be happy and feel save.
if you are china's enemy, you are scared and worried, that's your problem.

 

[haidian]

China defense budget is two times of Russia now, US has the largest one but it spread the money all over the world,we only focus on one region.

 

[Hypersonicmissiles]

Not enough spending. We need to spend 5% of GDP.

 

[Chinese-Dragon]

Not enough spending. We need to spend 5% of GDP.

I think 4-5% is a good compromise, considering we need to catch up on technology, we have a population of 1.3 billion, and we have to defend one of the largest landmasses out of any country on Earth.

We've got trillions sitting in foreign exchange bonds, earning next to nothing in profit. What are a few more billions for national defense?

 

[Hypersonicmissiles]

I think 4-5% is a good compromise, considering we need to catch up on technology, we have a population of 1.3 billion, and we have to defend one of the largest landmasses out of any country on Earth.

We've got trillions sitting in foreign exchange bonds, earning next to nothing in profit. What are a few more billions for national defense?

We would rather lend the Yankees $1 trillion than spend an extra $300 billion on national defence to protect China from Japan, US, India, Vietnam and Philippines.

 

[Chinese-Dragon]

We would rather lend the Yankees $1 trillion than spend an extra $300 billion on national defence to protect China from Japan, US, India, Vietnam and Philippines.

We lend them money, so they can continue buying Chinese products, and continue to bankrupt themselves.

Not a bad deal. It boosts our economy and our factories, while bankrupting America.

But it puts us at risk when America is eventually unable to pay back their loans, but at that point, the goal has already been completed.

 

[tranquilium]

Not enough spending. We need to spend 5% of GDP.

We would rather lend the Yankees $1 trillion than spend an extra $300 billion on national defence to protect China from Japan, US, India, Vietnam and Philippines.

5% is a bit excessive for now. though the current 1.5% is a bit low. 2 to 3% sounds about right, but then again we don't have all the bills and necessary data in front of us, so I would rather leave the decision making to professionals.

Investment into US bonds isn't that bad. Despite its relative decline, US economy is still way better than that of the Europeans and South/Southeast Asia.

 

[UKBengali]

I think 4-5% is a good compromise, considering we need to catch up on technology, we have a population of 1.3 billion, and we have to defend one of the largest landmasses out of any country on Earth.

We've got trillions sitting in foreign exchange bonds, earning next to nothing in profit. What are a few more billions for national defense?

For a developing country like China 4-5% is not really appropriate.

China has massive needs to build up more infrastructure and also spend on areas like education, health and social welfare for it's ever growing elderly population.

Even if China was to spend 4-5% of it's GDP, the weapons that it would procure in large numbers would be inferior to what the US has. Better to wait another 10 years for the gap to close and then purchase weapons in large numbers. The current budget gives ample funding for R&D and spending 2-3 times as more would not really help much.

I think 2% a year is about right now and then maybe increase over the long term to 3% a year in order to be able to match the US.

 

[Hypersonicmissiles]

We lend them money, so they can continue buying Chinese products, and continue to bankrupt themselves.

Not a bad deal. It boosts our economy and our factories, while bankrupting America.

But it puts us at risk when America is eventually unable to pay back their loans, but at that point, the goal has already been completed.

So we make all the products like slaves and Americans get to enjoy all the fruits of our labour.

What a nice deal.

 

[Chinese-Dragon]

I think 2% a year is about right now and then maybe increase over the long term to 3% a year in order to be able to match the US.

That sounds reasonable.

The thing is that investment in China is becoming saturated, which is why we are investing so much overseas.

Traditionally, investment contributes by far the most to our GDP compared to exports and consumption. But we are in the middle of rebalancing away from that type of model.

There is a lot of spare cash sitting in US and Euro bonds, to the tune of trillions, with very little return. It would be better to put it into something more productive, which is why the CIC was formed to invest some of it overseas.

So we make all the products like slaves and Americans get to enjoy all the fruits of our labour.

What a nice deal.

They get a momentary enjoyment in exchange for long term economic victory for us. Sounds like a good deal to me.

I prefer a stronger economic foundation rather than buying a new smartphone every other month.

And don't you live in America?

 

[Hypersonicmissiles]

That sounds reasonable.

The thing is that investment in China is becoming saturated, which is why we are investing so much overseas.

Traditionally, investment contributes by far the most to our GDP compared to exports and consumption. But we are in the middle of rebalancing away from that type of model.

There is a lot of spare cash sitting in US and Euro bonds, to the tune of trillions, with very little return. It would be better to put it into something more productive, which is why the CIC was formed to invest some of it overseas.



They get a momentary enjoyment in exchange for long term economic victory for us. Sounds like a good deal to me.

I prefer a stronger economic foundation rather than buying a new smartphone every other month.

And don't you live in America?

The whole point of an economy is to enjoy the fruits of your production.

What's the point of having jobs when you're still in poverty?

All the slaves had jobs, but they couldn't buy any products as they didn't have the purchasing power.

America just prints money and buys Chinese made products.
American companies make all the profit and American consumers live like kings.
While Chinese workers work hard for $2 a day.

 

[Genesis]

China's actual spending could be much higher. I mean development costs, especially missiles, nuclear subs and such are not included.

To tell you the truth, I doubt China reports as the Americans do, not that they do report 100%. But looking at how China treats military, this budget can't be the whole deal.