China To Double Military Budget By 2015
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
China is set to double its defence budget to more than $238 billion a year by 2015, claimed a report by the Financial Times on Monday, as Beijing attempts to close its military gap with the US amidst growing tensions in Asia.
China is set to double its defence budget to more than $238 billion a year by 2015, claimed a report by the Financial Times on Monday, as Beijing attempts to close its military gap with the US amidst growing tensions in Asia.
The country’s official military spending has increased at a double-digit rate for all but one of the last 23 years, said an analyst at IHS Jane’s Defence, who forecasted the budget’s growth to accelerate even faster over the next three years.
According to IHS Jane’s analysts, this could eventually reach an annual rate of increase of around 18.75 percent, meaning that China’s defence budget could hit $238 billion in 2015, despite spending just $120 billion this year.
Related: Oil Claims in South China Sea: Will International Law or Force Prevail?
Related: America’s New “Pacific Offensive” – A Strategy To Contain China: Sanjaya Baru
If the forecast comes to fruition, China’s military spending would surpass the joint total military spending of NATO’s top eight members, bar the US; And while Beijing has officially puts its 2011 defence budget at $91.5 billion, most analysts, including IHS Jane and the US Defence Department, believe that the official figure is actually understating the true defence budget.
[quote]“When you think of the reach China has got and the resources, it (Jane’s forecast) is not surprising,” said Kerry Brown, head of the Asia programme at Chatham House. “Why wouldn’t it (China) desire to have such military kit?”[/quote]Still, other analysts have questioned whether China could really afford to increase its spending on defence as aggressively as the forecasts have anticipated, particularly as the nation continues to spend large sums of money on re-adjusting its economy.
Related: Chinese Banks Ordered To Extend $1.7 Trillion In Loans To Local Governments
Related: Is China Heading For An Economic Slowdown?
On its part, Beijing maintains that its defence spending has always been in line with the pace of its economic growth, with the budget’s higher growth in 2011 reflecting a return to the nation’s faster GDP growth following the financial crisis.
“For quite a long time, their (China’s) military expenditure has tracked the trend of economic growth. That appears to be a pretty consistent policy,” said Sam Perlo-Freeman, a military expenditure expert at the Stockholm International Peace Research Institute.
