China plans to slow expansion of defense spending in 2010

By Bloomberg News
Friday, March 5, 2010

BEIJING -- China plans to boost defense spending by 7.5 percent this year, the slowest pace of expansion in a decade, as the government seeks to allay concerns about the country's growing military might.

The increase to $78 billion compares with a 14.9 percent rise in 2009. China's defense budget had been expanding by at least 10 percent a year for a decade.

"The Chinese government has always paid attention to controlling the size of our defense spending," National People's Congress spokesman Li Zhaoxing told reporters in Beijing on Thursday. "China is committed to a policy of peaceful development."

China's military spending is second only to that of the United States, which aims to spend $636.3 billion this year, and is more than double India's budget of $32.1 billion.

"While this year's increase is down a bit, we are still talking about an increase that is much bigger than Western nations and one that allows for a significant military buildup to continue," said Andrew Davies, director of operations and capability at the Canberra-based Australian Strategic Policy Institute.

China's military spending in 2007 accounted for 2 percent of its gross domestic product, according to the latest figures from the Stockholm International Peace Research Institute. That compares with 2.4 percent for India, 0.9 percent for Japan and 3.5 percent for the United States. China's spending for 2010 amounts to 1.8 percent of GDP.

This year's actual spending could be as much as 2 1/2 times the official budget, said Phillip Saunders, a research fellow at the National Defense University's Institute for National Strategic Studies in Washington. The published figure doesn't include purchases of foreign weapon systems and pensions, he said.

China's sustained military buildup comes as other governments in the region have either cut or held expenditure steady, raising concerns that a power imbalance was building. China has territorial disputes with neighbors including Japan, India and Vietnam, and it regards Taiwan as a renegade province that will be reunited by force if necessary.

"Their capability is increasing relative to others, and countries in the region are worried about that," Saunders said. "A lot of people think China wants to be a dominant military power in the region."

China's military is starting to have a presence far from its shores. Last year, Chinese navy ships protected sea lanes from Somali pirates in the Middle East.

China's defense budget comes amid tensions with the United States over the latter's plans to sell $6.4 billion in missiles, helicopters and ships to Taiwan. After the sale was announced in January, China said it was suspending military-to-military contacts and would sanction U.S. companies whose weapons were sold to Taiwan.

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