China's Defense Budget
China's "Official" Budget
Every March, as part of its annual state budget, the Chinese release a single overall figure for national military expenditures.
In 2000, the official budget figure was approximately 14.6 billion, or 121 billion yuan. China increased its defense spending for the year by 17.7 percent.
In early 2001, China's publicly-acknowledged defense budget of over $17 billion for 2001 was higher than the defense budgets of neighboring countries India, Taiwan, and South Korea. Beijing explained this increase as a response to "drastic changes" in the military situation around the world, a reference to the US-led war in Kosovo in 1999.
In 2002, China increased military spending in 2002 by 17.6 percent, or $3 billion, bringing the publicly reported total to $20 billion.
China again increased its budget to $22 billion in 2003 (about 185.3 billion RMB).
China's defense budget continued to grow in 2004. Chinese Finance Minister Jin Renqing proposed an increase of 11.6 percent [$2.6 billion] in military expenditures. The government forecast total revenue for the central budget at $157 billion, up 7 percent [$10.9 billion] from 2003, with a 7 percent boost in overall spending from 2003. The country's $38.7 billion deficit was the same as 2003. Adding off-budget funding for foreign weapons system imports, total defense-related expenditures for 2004 were estimated at between $50 and $70 billion dollars by Richard Lawless, the Deputy Undersecretary of Defense.
The Information Office of China's State Council issued on 27 December 2004 a white paper titled "China's National Defense in 2004". Pursuant to the National Defense Law, the Chinese government follows the guiding principle of the coordinated development of national defense and economy.
In 2005, it was announced that China's military budget will rise 12.6 percent, to 247.7 billion yuan ($29.9 billion). China has announced double-digit increases in military spending nearly every year for more than a decade.
In March 2006 the Chinese government announced an official defense budget of about $35 billion for 2006, an increase of nearly 15 percent over the previous year.
Analysis of PRC budget data and International Monetary Fund (IMF) GDP data for the period of 1996 to 2006 shows average annual defense budget growth of 11.8 percent (infl ation adjusted) compared with average annual GDP growth of 9.2 percent (inflation adjusted). Of note, China’s 2006 Defense White Paper contains a similar analysis in stating that between 1990 and 2005 the defense budget grew by an average of 9.6 percent between, while China’s GDP over the same period grew in constant prices an average of 9.7 percent yearly, according to the IMF. The 1996-2006 data is a more useful measure, however, as it covers the period following the 1995 and 1996 Taiwan Strait crises and incorporates the 9th and 10th Five Year Plan periods (1996-2000 and 2001-2005, respectively) in which the post-Persian Gulf War reinvigoration of the PLA modernization drive would be fully reflected.
In March 2007, China announced that it would increase its annual defense budget by 17.8% over the previous year, to $45 billion.
In March 2008, China's State Council submitted a proposal to a National People's Congress session to consider the approval of 417.8 billion yuan -- about US$57.22 billion -- in defense spending for the country in 2008.
China announced a nearly 15 percent rise in military spending on 04 March 2009 — a smaller boost than in previous years — as the national legislature prepared to open its annual session with a focus firmly on overcoming the country's brewing economic crisis. The 14.9 percent increase in defense spending is the lowest in three years, a possible reflection of shifting priorities. The 480.68 billion yuan (US$70.27 billion) military budget follows a 17.6 percent increase last year and 17.8 percent in 2007 — the biggest jump in more than a decade. It also was the 19th double-digit percentage increase in the past two decades.
Military Spending
