Roving Periscope: China ups defense budget, says it’s lower than America’s
Virendra Pandit
New Delhi: Amid rising tensions with most of its neighbors, China is set to boost its defense budget this year by 7.2 percent at 1.6 trillion yuan (USD 222 billion), the world’s second-highest after the United States.
Releasing the latest budget estimates, Beijing also toughened language against Taiwan, dropping the words “peaceful reunification” in a government work report, the media reported.
The move was announced on Tuesday during the opening session of the National People’s Congress (NPC), being held from March 5 to 12, mirroring the rate presented in last year’s budget and again coming in above the government’s economic growth forecast for this year.
Tensions have risen sharply in recent years over Taiwan, the democratically ruled island that China claims as its own, and elsewhere across East Asia as regional military deployments rise. The Dragon also has serious territorial disputes with India, the Philippines, Japan, and even Russia, among other countries.
China plans to purchase new equipment, which will take up the largest single chunk of the budget as the military works to meet President Xi Jinping’s goal of full modernization by 2035. The Dragon is already producing weapons ranging from warships and submarines to drones and highly advanced missiles that can be equipped with both nuclear and conventional warheads.
Beijing’s continuous military spending increases without sufficient transparency were “the biggest strategic challenge ever to ensure the peace and stability of Japan and the international community and strengthen international order,” said Japanese government spokesperson Yoshimasa Hayashi in Tokyo.
In contrast, India’s interim budget in FY25 is to the tune of Rs 6.1 lakh crore vis-a-vis China’s Rs 19.26 lakh crore.
In recent times, China has upped the ante in the South China Sea and has been locked into heated confrontations with the US-backed Philippines, which has stepped up efforts to assert its claims in the disputed waters. Beijing and Manila are claiming the uninhabited Second Thomas Shoal in the Philippines’ exclusive economic zone. The Philippines deployed resupply missions for Filipino soldiers living aboard an aging warship deliberately run aground in 1999 to protect Manila’s maritime claims.
Compared with major military powers, such as the U.S., China’s defense spending is “quite low,” whether as a percentage of GDP or total budget or in terms of per citizen or service member expenditure, Lou Qinjian, spokesperson for the second session of the 14th National People’s Congress (NPC) said.
Meanwhile, Chinese Premier Li Qiang announced an ambitious 2024 economic growth target of around 5 percent on Tuesday, promising steps to transform the country’s development model and defuse risks fuelled by bankrupt property developers and indebted cities. This signals it is prioritizing growth over any reforms even as Li pledged bold new policies, analysts said.
China started the year 2024 with a stock market rout and deflation at levels unseen since the global financial crisis of 2008-09. The property crisis and local government debt woes persisted, increasing pressure on China’s leaders to come up with new economic policies. With China’s economic miracle fading rapidly, some economists have drawn comparisons with Japan’s lost decades since the 1990s, calling for pro-market reforms and measures to boost consumer incomes.
Faced with a demographic crisis that also threatens the switch to a consumer-led growth model, China’s state planner vowed to improve policies supporting childbirth, while raising benefits and basic pensions for its growing elderly population. China also plans to run a budget deficit of 3 percent of economic output, down from a revised 3.8 per cent last year.
