China’s Slowdown Hits Defence Budget

The Straits Times

05 March 2016

An economy that is larger but slowing down, and more efficient use of military expenses may explain why China’s defence spending increase this year is lower than expected, according to observers.

Parliamentary spokesman Fu Ying said yesterday the planned increase of 7 to 8 per cent in the defence budget – the slowest pace since a 7.5 per cent rise in 2010 – was based on factors such as national defence needs, the state of the economy and the performance of China’s fiscal revenues.

Beijing-based military expert Song Zhongping said the slump in the world’s No. 2 economy, set to grow at its slowest pace since 1990, makes it necessary to adjust defence spending.

… Singapore-based analyst Li Mingjiang said China may not be deliberately trying to assuage the concerns of rival claimant-states in the South China Sea by slowing the expansion of its defence budget. “But the move does send a signal that China is predominantly concerned about domestic affairs and is not trying to increase its budget for military actions in the South China Sea,” he told The Straits Times.

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Last updated on 07/03/2016