08 March 2016
Most militaries would kill for a 7.6% increase in their defense budgets. For China’s People’s Liberation Army (PLA), however, this amount is considered a major hit. That is because it is the lowest increase in Chinese defense spending in nearly twenty years, and it could presage a new phase of austerity for the PLA.
The National People’s Congress, China’s rubber stamp parliament, will soon approve a new defense budget totaling around 954 billion yuan (US$146 billion), up 7.6 percent from 887 billion yuan in 2015. This is the lowest increase in Chinese military spending since 2010, when the defense budget grew by 7.5%. Last year, the PLA’s budget grew 10%, and in 2014 it received a 12.2% increase. Altogether, Chinese military expenditures grew an average of 9.5% annually from 2005 to 2014, according to the US Defense Department.
One reason for this smaller-than-average increase is fiscal. China’s economy is slowing significantly, growing just 6.9% last year. This was one of the smallest increases in Chinese GDP in decades, and just a fraction below the growth rate of 7 to 8% that Beijing deems necessary to absorb the millions of people who annually enter the national workforce.
In the past, the PLA has been shielded from the vicissitudes of China’s overall economic development. Indeed, the military was one of the few public institutions in China that enjoys across-the-board support. As such, increases in Chinese defense spending have almost always outstripped the growth in GDP. Since the late 1990s, China’s defense budget has gone up around 600%, after taking inflation into account. Few militaries – and certainly none in recent memory – have enjoyed such largesse.
… Richard A. Bitzinger is a Senior Fellow and Coordinator of the Military Transformations Programme at the S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore. The opinions expressed here are his own.
IDSS / Online
Last updated on 09/03/2016