international analysis and commentary

China’s military spending: no cause for panic


When the Chinese government released its latest defense budget, there was once again considerable angst in the United States and its East Asian allies. The official budget showed an increase of 10.7% from the previous year, continuing a trend over more than a decade of annual double-digit growth. A budget that was only $22.3 billion in 2003 had grown to $60.1 billion in 2008 and $115.7 billion in 2013.    

Such a trend suggests that improving the country’s military capabilities, primarily through modernization programs, is a high priority for China’s political elite.  Furthermore, virtually no knowledgeable person believes that the official budget accurately measures the extent of Beijing’s military spending. Several key items, including the costs of research on new weapons, are not included in that budget.

Independent estimates vary widely, though, and have done so throughout the past decade. At the time that Beijing said its defense spending was a mere $35.0 billion in 2006, the US Pentagon estimated the actual spending was between $70 billion and $105 billion. The prestigious International Institute for Strategic Studies concluded that the budget was $62.1 billion, and a separate estimate based on purchasing power parity put the figure at $128 billion. The Pentagon’s high-end estimate for 2011 (the last year when complete figures are available) was $180 billion, and the IISS’s purchasing power parity figure for that same year was $197.9 billion.

Adding to the sense of unease in the US and China’s neighbors is the chronic lack of transparency about Beijing’s underlying security doctrine. US officials in both the Bush and Obama administrations expressed the view that China’s spending seemed excessive for the country’s legitimate defense needs.

But the surge in Beijing’s military outlays needs to be viewed in context. Even if one accepts the high-end estimates of the Pentagon and IISS (which are hardly indisputable), the United States still spends better than three times as much as China.  Chinese officials have stressed that point in response to Washington’s criticism that the PRC’s budgets are excessive. 

The gap is even more glaring when one considers that the United States is located in a placid region with no serious rivals or pressing security concerns. Conversely, China is located in a region with numerous rivals (actual and potential), most notably Japan, Russia, Vietnam, and India, and confronts several volatile security issues, including territorial disputes in the East China and South China seas, Taiwan’s still unresolved status, and North Korea’s unpredictable, often destabilizing, behavior. Moreover, unlike the United States and most of its allies, the Chinese military has extensive responsibilities for maintaining domestic order. And given the unrest in both Tibet and Xinjiang, that is not a minor mission.

Writing in the Fall 2012 issue of the Washington Quarterly, Andrew Scobell, a senior political scientist at the RAND Corporation, and Andrew J. Nathan, Professor of Political Science at Columbia University, conclude that far from engaging in a wild spending spree producing a menacing increase in capabilities, China’s military is actually “overstretched,” given the country’s security challenges. They argue that the PLA “is far from able to successfully carry out all its most pressing military tasks within China’s borders and in its immediate neighborhood.” They note further that only recently and to a very limited extent has China begun to project military power beyond the extreme western Pacific.

The nature of Beijing’s military buildup tends to confirm the judgment of Scobell and Nathan. The overall goal has been to transform the PLA from a personnel-heavy force, designed to wage the kind of wars that characterized the 19th century and first half of the 20th century, into a modern, technologically sophisticated 21st century military. More specifically, the modernization program has emphasized developing anti-ship ballistic missiles, attack submarines, anti-satellite weapons, and various forms of cyber warfare. 

All of those changes appear to have a common purpose. They are primarily designed to enhance China’s ability to defend or advance its security interests in its neighborhood, not to project power over vast distances. Those regional interests include pressing its territorial claims in the South China Sea against competing claims from Vietnam, the Philippines, and other neighbors, waging a contest with Japan in the East China Sea over the disputed Senkaku/Diaoyu islands, and dealing with Taiwan’s de facto independence. The last issue remains an especially high priority for Chinese leaders. As a March 21, 2013 Congressional Research Service report noted, most observers “believe that China wants its military to be capable of acting as a so-called anti-access force – a force that can deter US intervention in a conflict involving Taiwan, or failing that, delay the arrival or reduce the effectiveness of intervening US naval and air forces.”

The Chinese buildup certainly poses a concern if the United States persists in its implied policy of intervening in the event of a conflict between Beijing and Taipei. The potential costs of enforcing that policy are rising, and the wisdom of continuing it is increasingly doubtful. China’s neighbors, especially Taiwan and Japan, also might be wise to reassess their own tepid levels of defense spending. In particular, indications coming out of Tokyo that the new government of Prime Minister Shinzo Abe might decide to abolish the country’s self-imposed limit of spending no more than one percent of its gross domestic product on the military are long overdue.

But the modest increases in Beijing’s military capabilities are a far cry from China seeking to become a global military rival of the United States. China already is a major global economic and diplomatic player, and it is now a serious regional military power as well. But the PRC is still decades away from competing with America’s military clout on a global basis, if such a challenge ever emerges. Beijing’s latest defense budget does not change that reality in any meaningful way.