China's Military Budget Reported at $59 Billion

By Jill Drew
Washington Post Foreign Service
Wednesday, March 5, 2008

BEIJING, March 4 -- China announced Tuesday that it will again sharply increase its military spending this year, budgeting a 17.6 percent rise that is roughly equal to last year's increase.

Disclosure of plans for a $59 billion outlay in 2008 followed a Pentagon report Monday that raised questions about China's rapidly increasing military budget, and came less than three weeks before a presidential election in Taiwan, the self-governed island over which China claims sovereignty.

A spokesman for the Chinese legislature said the country's decade-long military buildup does "not pose a threat to any country," but he warned that relations with Taiwan were at a "crucial stage" and that the island would "surely pay a dear price" if it were to take steps that China viewed as a declaration of independence.

At the same time Taiwanese choose a president, they also will vote on a referendum issue asking whether the island should apply for U.N. membership under the name Taiwan.

China's reported $59 billion budget is still a fraction of what the United States spends each year on its armed forces. President Bush last month requested $515 billion to fund the Pentagon in fiscal 2009, a 7.5 percent increase, plus $70 billion for the wars in Iraq and Afghanistan.

The United States has pressed China to be more open about its intentions as the scope of its military capabilities and pace of spending increase. At a Pentagon briefing Monday, David Sedney, deputy assistant defense secretary for East Asia, reiterated the U.S. view that China's defense establishment still severely underreports total spending and has not been clear about its intentions.

"China's military buildup has been characterized by opacity," Sedney told reporters, and "by the inability of people in the region and around the world to really know what ties together the capabilities that China's acquiring with the intentions it has."

The Pentagon report said China's near-term focus remains on preparations for potential problems in the Taiwan Strait. But China's nuclear force modernization, its growing arsenal of advanced missiles and its development of space and cyberspace technologies are changing military balances in Asia and beyond, the report concluded.

Chinese Foreign Ministry spokesman Qin Gang said at a news conference in Beijing that the United States was stuck in a "Cold War mentality" and that the annual Pentagon report on China's military power, mandated by Congress since 1999, "is a serious distortion of facts and attempts to interfere in China's internal affairs."

Jiang Enzhu, a spokesman for the National People's Congress, said at a separate news conference that the 2008 budget would fund only a "moderate increase" in weapons purchases. Most of the additional funds would go toward higher military salaries, rising oil costs and training programs, he said. He noted that the country has a long-standing plan to modernize its forces.

Jiang said that from 2003 to 2007, China's national defense spending increased by an annual average of 15.8 percent, while government revenue increased by an annual average of 22.1 percent. Defense spending was the equivalent of 1.4 percent of China's gross domestic product last year, he said. By comparison, he said, U.S. defense spending was 4.6 percent of GDP and Britain's was 3 percent.

Although the Pentagon report raised questions about China's military intentions, Sedney told reporters Monday that he had just returned from "surprisingly successful" talks with his Chinese counterparts.

In addition to reaching a deal to establish a military telephone link between the two countries, announced last week, the two sides agreed to move forward in a dialogue on nuclear strategy and policy, he said.


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