China’s defense spending mystery
March 12th, 2013
04:28 PM ET

China’s defense spending mystery

By Scott Harold, Special to CNN

Editor’s note: Scott Harold is an associate political scientist for the nonprofit, nonpartisan RAND Corporation. The views expressed are his own.

China has once again announced a major expansion in its defense spending, leaving outside observers to again debate what this all could mean. Unfortunately, the planned 10.7 percent increase for 2013 posed more questions than it answered: Is it a sign of a more assertive China that wants to pursue regional dominance? Is it an indication of a country seeking to redress long-term weaknesses in its military? Or is it a sign of a domestic leadership that can’t say no to the military at a time of political transition?

The fact is that it’s a bit of all of these.

In absolute terms, the official Chinese defense budget is slated to rise from approximately $106.4 billion in 2012 to $119 billion this year. (The White House, meanwhile, proposed a $553 billion budget for the U.S. Defense department in fiscal 2012). This means that, after subtracting out expected inflationary costs, the People’s Liberation Army will have approximately $12 billion more in budget this year than last.

Since the late 19th century, Chinese nationalists have dreamt of building a powerful military to restore China to a position of pride in the international system, with some hoping to go further and achieve a dominant position in East Asia. Chinese analysts can also see that the capabilities of the U.S. military are in most ways superior to those of China, a situation they perceive as even more disturbing in light of the U.S. “rebalancing” to the Asia-Pacific.

An enhanced commitment to strengthening its military serves these internal needs while at the same sending a message to the world that China is prepared to meet any challenge that may arise from an increasingly complicated external environment.  To the east and south lie maritime territories claimed or held by other states that China hopes to claim for itself.  The tightening of U.S. alliance relations across East Asia poses new challenges for China’s military leaders to plan against. North Korea’s nuclear program further complicates matters.

More from GPS: How to avoid China-Japan clash

At the same time, China also needs to devote resources to the task of transforming a large, outmoded ground-centric force into a more mobile and networked military that is also capable of operating in the naval, air, space, electro-magnetic and cyber domains as well. The Chinese military is also being called on to prepare for new missions, such as conducting counter-piracy operations off the Horn of Africa or evacuating Chinese nationals when emergencies occur overseas, and these require additional capabilities and resource commitments.

The decision to expand defense spending also carries clues about the Party’s need to keep the military happy, the new leadership’s confidence and new President Xi Jinping’s ability to put his own stamp on policy from the start. Xi appears to be more in charge than either Hu Jintao or Jiang Zemin were at comparably early stages in their own transitions to power. At a minimum, Xi and his new leadership team appear to have felt comfortable enough in their new posts to slow the growth of defense spending, even if they continued to expand spending as a whole. Yet, the Chinese Communist Party’s heavy emphasis on nationalism as a justification for its own legitimacy has meant the leadership must continue to invest in national defense and ensure that the military remains satisfied with its budgetary support.

The details of how Beijing plans to allocate its 2013 defense outlays are unknown, but China’s neighbors are hungry for answers.

If the increased expenditures are dedicated to acquiring power projection capabilities such as research on new weapons systems, improved cyber warfare abilities, procurement of more land-attack missiles and anti-satellite weapons, acquisition of stealthy armed drones, submarine-building, or procurement of air- and sea-lift capabilities that could be used to invade Taiwan, China’s neighbors would likely be anxious. In contrast, if such funds are spent primarily on ground force modernization and air defenses – systems more defensive in nature – they would likely be less concerned. If such funds go primarily towards the construction of improved barracks housing, food, clothing, energy costs and salaries for enlisted soldiers, sailors, and aviators, the region would be less worried still.

But the reality is that foreign observers are unlikely to know how these funds are spent for some time to come, if ever. China’s political system gives little oversight of the military budget to legislators, civil society, or the media, leaving it to the top leadership of the Chinese Communist Party and the People’s Liberation Army alone to decide how defense funds are spent and to release only such information on funding allocation as they see fit. This lack of transparency and accountability also means some military funds are almost certainly siphoned off in corruption.

China is clearly committed to building a strong and modernized military, especially against a backdrop of an increasingly complex external security situation. At the same time, the budget increase serves a parallel goal – that of cementing the critical bond between the new leadership and the military.

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Topics: China • Military

soundoff (44 Responses)
  1. ChasL

    Even with the 10.7% increasse, China's military budget is still about 1/6 of our 711 billion spent on arms (excluding black budget). China's military expenditure has consistently stayed around 2% of GDP (ours is 5%, over twice as much). Compairing with next highest national defense budget, China with 50X more territory than UK, only spend 2X as much.

    I wish our media can be less sensational and more factual. After all you are not state-sponsored media.

    March 13, 2013 at 1:03 am | Reply
    • moderateGuy

      Of course most of US "defense" budget are salaries for military and civilian DoD personnel. Since the average American soldier earns 10 times as much as the average Chinese peasant dragooned into PLA, China can afford to spend a "mere" 1/6 of US "defense" budget, and still outspend the US on actual war making capability.
      Just thought you'd want to know.

      March 13, 2013 at 12:48 pm | Reply
      • joe

        The Chinese can fight you for 1/6 of the costs, yet you still want to fight them and think you will win. You must live in a stupid country.

        March 13, 2013 at 1:42 pm |
      • rtrauben

        well said but i suspect the %expenses of equipment is higher than the salary/headcount.
        )cost of F15, air carrier, submarine, tank and missle far exceeds a soldiers pay).

        also you need to factor in headcount of the chinese military being larger than the US
        just based on raw population. in short we dont know very much.

        March 15, 2013 at 9:46 am |
      • Bill39

        Joe– I don't know where you get your far out ideas. Or are you trolling?

        Fighting China is very far from the USA's intentions. I could only see that happening if China made a huge change in foreign relations.

        March 15, 2013 at 10:39 am |
      • patriot

        china works hard. we dont. so china gets to spend all that cash on defense.

        March 16, 2013 at 2:33 pm |
    • LT Fang

      There is a total lack of transparency in the Chinese budget. There is very little reason for China to inflate their defensive budget. Rather, they have a lot of incentive to understate their actual military spending. It is highly likely that China's actual military spending is a lot higher than what they say it is.

      March 13, 2013 at 6:11 pm | Reply
    • Chicagorich

      In both countries cases, the amount published does not tell the whole story. China's defense spending has been ambiguous for years. The published budget amount is nearly meaningless if one is actually trying to figure out how much is actually being spent.

      March 16, 2013 at 12:12 pm | Reply
    • Tron San

      .

      不出二十年將出現中國主導的世界經濟格局

      美國經濟領先地位將被中國超越

      在中國經濟光芒下黯然失色

      中國得善用自己放款國的身份

      令欠債國屈服

      則在全球的領導地位更為鞏固

      美國 -

      債台高築 貧富不均 政治爭拗不休 利益團體權力膨脹

      未來十年內難有經濟增長的動力

      .

      April 7, 2013 at 9:27 am | Reply
  2. j. von hettlingen

    China's new-found strength is shown in its assertiveness on the global stage. It dismisses concerns about its high defence spending and doubts about its "peaceful rise". China's military budget is keenly watched both by the US and neighbouring countries. China has seen several years of double-digit military spending and the actual expenditure is believed to be far higher. Nevertheless the figures fall well short of US military spending.

    March 13, 2013 at 7:53 am | Reply
  3. 100 % ETHIO

    Every year, Millions of People are getting killed by Weapons around the World.

    Astonishingly, the most responsible Industrial Countries, U.S and China are still talking about and planned to Modernized and add more Weapons, that could kill more and more people around the World, every year.

    These few Satanics, do not dare about supplying their Weapons to other Nations to kill each other.
    Don't they think about, how to minimized Weapons and increase Medical and other useful research, than Maximizing High-Tech Weapons?
    Are they Satan or Human?
    I said, they are both Satan.

    And also, the writer must know that, none of them are foolish to Publicly introduce their Satanic(Militarily) actual budgets.

    @@@@ Think and discuss about how to live long, rather than short.

    March 13, 2013 at 12:24 pm | Reply
    • jimbo

      Haha, thanks for the laugh. Freakin satanists are gonna get ya!

      March 18, 2013 at 6:52 pm | Reply
  4. Really?

    Author, stop fear mongering, the US spends more than the top five countries after it. Cut the MIC military budget FIRST!

    March 13, 2013 at 12:49 pm | Reply
    • joe

      If they don't do fear mongering, how will MIC keep or increase their budget ?

      March 13, 2013 at 1:48 pm | Reply
  5. 100 % ETHIO

    ...even, the Pope is resigning, when Satan is rising. He can not handle it more with Earthly life, where Spiritual life mixed with Earthly life.

    Positively, the end is near. To bless the good and to throw the bad.

    Let Almighty God bless all of us.

    March 13, 2013 at 12:49 pm | Reply
  6. john

    joe, your a stupid moron

    March 13, 2013 at 2:57 pm | Reply
    • me

      Perfect

      March 13, 2013 at 6:46 pm | Reply
  7. Gussie

    There are no substantiated facts given by the reporter or the commenters. The U.S. just lost another two long extremely costly wars in the last ten years. Large budgets do not make for success. If you don't know Chinese history, you may wish begin. It was the most illustrious civilization the earth has known for centuries, it is on the rise, and "spending money & creating alliances buying global lands and scarce resources". That's what one might call "strategic military intelligence" that won't show up on a so-called defense budget. For fun & wisdom: Stop playing chess and begin playing the Chinese strategic game "Go" - I think you'll find it more than challenging and that more losing "pieces" are left on the board in "Go" than ever can be in chess. Which is more enlightened. Which is more difficult to achieve? Which country is most capable of doing so?

    March 13, 2013 at 9:29 pm | Reply
  8. jeng

    Well done China, go go go.

    March 13, 2013 at 9:53 pm | Reply
  9. russell lee

    "Follow Me", said He. But did He walk around waving and grinning at the people?"

    March 13, 2013 at 10:01 pm | Reply
  10. vaultpress7098e52a812fa630a2cfec3d72a231a7

    "If the increased expenditures are dedicated to acquiring power projection capabilities such as research on new weapons systems, improved cyber warfare abilities, procurement of more land-attack missiles and anti-satellite weapons, acquisition of stealthy armed drones, submarine-building, or procurement of air- and sea-lift capabilities that could be used to invade Taiwan, China’s neighbors would likely be anxious. In contrast, if such funds are spent primarily on ground force modernization and air defenses – systems more defensive in nature – they would likely be less concerned"

    So basically, if China spent money on actually building a competent, modern, 21st century army everyone throws a hissy fit. If China wasted money and castrated the army by staying in the 19th century, with gunpowder and flak cannons everyone is satisfied. This is ridiculous

    March 13, 2013 at 11:23 pm | Reply
  11. brown

    China intends to expel the U.S.A from Asia Pacific in our lifetime.

    Once this objective is achieved, the rest of the Asian countries will accept their station in life.

    March 14, 2013 at 3:08 am | Reply
  12. Matt

    No it is not, that is what I swapped with the Russians to go into Libya and why Putin was overruled. I know because Putin has a tough guy image that Meds is thus weak, he don't do free look at Syria a massacre.

    March 14, 2013 at 7:49 am | Reply
  13. David

    Everyone is missing the point. Military power equates to national power – the capability to influence others to your benefit. China will continue building up its military capability to ensure access to the resources necessary to sustain its population, and by this, placate its population into accepting its political system. The percentage increase is a statement that may be true or false, but again, it achieves the objective. Convince the world that you are increasing your military capabilities so they will bend to your wishes internationally. National power, military power, and internally, political power the essential elements that China will continue to pursue.

    March 14, 2013 at 3:51 pm | Reply
  14. 100% ETHIO

    Some ethnic groups are responsible for stealing the Manhattan project and its Nuclear components to China.
    This...ethnic group cried loud to escape from Europe and to get-in to America.
    But, very soon, they forgot those Great-Britain and America Soldiers, who sacrificed their lives to them.

    These...are natural born denials and thieves.
    I do not trust SWEJ.

    March 14, 2013 at 4:01 pm | Reply
  15. Tim

    The U.S. defence budget far exceeded the combined total of the 10 other biggest spender While USA account for 50% of the World Total Military expenditure, I never see you complaining.

    March 14, 2013 at 7:08 pm | Reply
  16. Benedict

    Need those missiles and war craft to keep the rest of the world in check,don't we?!!!.

    March 15, 2013 at 6:24 am | Reply
  17. jeff forsythe

    The brutal Chinese Communist Party is not concerned with the welfare of its people. Its main concern today is its own survival because it knows that it's members will soon have to stand trial for the millions of heinous acts of cruelty over the last century. Last year there were hundred of thousands of small rebellions across China, now that the people are becoming aware of what the Party truly is, a gangster regime that has murdered a hundred million of its own people and today has hundreds of thousands of its citizens in illegal slave camps hidden all over China. Slave camps where children sleep on cold floors in their own feces and where organ harvesting is performed on living people. These cruel facts are not discussed by the Western media and governments because of corporate greed.

    March 15, 2013 at 8:56 am | Reply
    • Really?

      Troll, all you want is instability and destruction for China! CCP has nothing when comparing to the US in the number of atrocities against it's own and people of the world.
      Against it's own, starting illegal wars, no health care, bailing out the banks etc....
      Against the world, Vietnam, Iraq, Afghanistan wars, agent orange, fake WMDs, attempt to spread "democracy" which is really neoliberalism to further US interests in the developing world etc....
      STOP THROWING STONES IN GLASS HOUSES!

      March 15, 2013 at 4:32 pm | Reply
    • Maersk

      jeffforsythe, the American kwok zucking kwok zucker, has indeed zucked his uncle's limply kwok one time too many and swallowed one mouthful too much, one can easily see the kum that is ozzing out of his kwok zucking mouth from being full already.

      March 15, 2013 at 10:23 pm | Reply
  18. Allen Demary

    It's nearly impossible to compare USA spending to China's spending. Where we have large company's getting rich from every thing we buy, China owns the company they are buying from. I would say its a safe bet to think the numbers would be about for every 10 dollars the USA spends on a Jet or tank whatever 4 or more dollars goes into someones pocket. I think when comparing a state controlled place like China military spending to the USA, its a safe bet to cut in the spending of the USA by at lest 40%. It would be a safe bet to assume that the company's surplussing our government are making that amount.

    March 15, 2013 at 9:22 am | Reply
    • Michael

      Allen,

      You are the most dangerous kind of ignorant person: the kind that forms strong opinions based off populist BS with absolutely no context, and presents them as fact.

      If you ever worked with DoD or with a Defense Contractor, you'd realize those companies actually have lower operating margins than most. We spend a lot because we go after high risk/high reward development projects. They cost alot, and can fail sometimes. 4 dollars goes into someones pocket? That doesn't even mean anything. Technically 100% goes into someones pocket, because ALL of that money goes to SOMEBODY. From the raw material producers, to the part manufacturers, to the subassembly design and manufacturing executers, to the assembly contractors, to the test agencies, that 10 bucks gets split out. Part of the reason it costs us a lot is because labor is expensive in the US (that's not necessarily a bad thing).

      I believe what you are ignorantly spouting off about is excessive contractor profit. As an example to show you what a fool you are, Lockeed Martin, one of the most prestigious defense contractors around, had a GROSS profit margin of 9.1% If you don't want to continue investing in our military dominance, I hope you are in the minority. Military is kind of like insurance. It seems like a waste of money until s**t hits the fan.

      March 15, 2013 at 10:13 am | Reply
  19. Pete

    Is that why China just recently bought a used Russian aircraft carrier like a used auto..China even if posters think are so advanced scientificly still don't have a lot of the advanced technologies that we've had in military hardware..They may have the largest military of foot soldiers in the world but trust me they're no match against our advanced military hardware...Maybe we should take a little advise from China and be a little more frugel in future military spending ,like buy and spy a little,it sure wouldn't hurt would it!!!

    March 15, 2013 at 10:53 am | Reply
    • Maersk

      Dickk head, you must not have remembered that the Chinese helped defeat your uncle and the UN in the Korean war. They also helped defeat your uncle in Vietnam. What the U.S. is good at is committing crimes against small countries who have no power to fight back.
      By the way, you need to go zuck your uncle's limply kwok one more time and swallow another mouthful until indeed you are full of it.

      March 15, 2013 at 10:32 pm | Reply
  20. daigawn

    Great so it'll only be 30 years before they match our defense budget since they've been increasing their military spending little by little hoping no one will see. So whats going to happen when that happens and they're tanks and jets are are on par with ours instead of being equivalant to going to war in giant soda cans? My real question is, who is going to stop them when their just as militarily powerful as we are and they begin to think as we do, enforcing their agenda regardless of international will?

    March 15, 2013 at 12:20 pm | Reply
  21. real rob

    Some good points here, but one area is missing, the truly! staggering! corruption in play at the higher levels of their military,,I dont use "staggering" lightly either, it is that and then some,,it is the 1500$ toilet seat, in another country,,Their only real enemy is themselves and if politicians are "cementing" it is likely because they are afraid they will have to use the military on their own people, and want a "threat" environment in play so they can make them! do so,,all the rhetoric about corruption in China, yet, we never, ever! hear of it in their military,,sometimes we can get usefull answers from what is not! said,..no?..The word ;"Oligarchy" is often in play when describing high level military in such countries, and perhaps in this instance? it is a correct usage, anyone?..

    March 17, 2013 at 11:17 am | Reply
  22. Benny

    Does anyone know that China spends more on "stability maintenance," the code word for internal suppression, than on defense, even according to their published official figures? "Stability maintenance" budget pays for their People's Armed Police (PAP), a heavily-armed paramilitary police force, Public Security, the regular civilian police, the criminal justice system, the prisons and hard labor camps. They are certainly more afraid of their "internal enemies" than external enemies. "Internal enemies" being the unemployed, people who were forced out of their homes for "development," workers in sweatshop conditions, environmental protesters, the disabled, etc.

    March 17, 2013 at 3:18 pm | Reply
  23. jrh0

    Here we go again. Cue the ridiculous complaints about the U.S. military budget without any understanding about how that budget is spent. EX: The cutting edge military development projects that are then transitioned to the civilian world. All the people complaining about the money the military gets to spend don't seem to be complaining about things like sonograms, gps, digital photography, Jet aircraft, the air traffic control system, the internet we are on right now. All these things were invented on the U.S. military's dime.

    March 18, 2013 at 11:37 am | Reply
  24. patriot

    God bless America, I love my country to a piont were i would die for it, I dont trust are government or are president but i will fight any enemy that threatens my freedom, my home and my family

    March 18, 2013 at 1:46 pm | Reply
  25. schicklgruber

    china and russia will unite thinking they can bully the world into tyranny and despotism. America will answer the call. But to ensure america buckles the chinese will first weaken the americans by implanting a double agent in the top office and pass law after law undermining americas strength.

    May 2, 2013 at 7:02 pm | Reply

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