CHINA> Opinion & Commentary
What's behind increase in the military budget
By Xu Guangyu
Updated: 2007-03-15 06:39

At the Fifth Session of the 10th National People's Congress, it was announced that the country's military budget for 2007 is 350.92 billion yuan, or roughly US$44.94 billion. This marks a 17.8 per cent increase over the previous year, or $6.8 billion.

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The increase has drawn wide attention from the international community. Many express misgivings out of shear misunderstanding. But some look at the increase through stained lenses or stretch the matter to suit their own ends. Others try to use the growth in China's military spending to create a propaganda splash.

A famous Chinese saying goes: "Seeking truth after facts." There is a similar saying in the West: "Facts speak louder than words." These two sayings apply to evaluating China's military spending increase.

I would like to offer my point of view in the hope of clearing away misunderstanding.

First comes the question: Why the increase by the unprecedented wide margin of 17.8 percent?

The growth is primarily caused by the sharp increase in the wages, living expenses and pensions of 2.3 million People's Liberation Army officers, civilian personnel, soldiers and army retirees. The pay rise came in the latter half of 2006.

Large numbers of officers from battalion level down and non-commissioned officers received the sharpest pay rise 100 percent.

These people constitute the backbone of the military forces, directly involved in leading soldiers in military duties, training programs and logistical activities. On the personal side, they are the primary source of income for their families. Over a long period of time, their wages have remained very modest.

In view of all this, it is imperative to raise their pay by large margins.

The pay of the officers from the regimental level up, civilian personnel and army retirees has also been increased by 80 percent.

At the same time, all rank-and-file soldiers' living allowances and board expenses have also been increased.

The composition of the Chinese military expenditure is roughly the same as that of the United States. Wages, housing and services take up almost one-third of the total spending.

Take 2006. These categories of expenditure stood at $12 billion, within the total $38.1 billion. Of this $12 billion, $8 billion went to wages, living costs and pensions.

With the rise in these budget by an average of 60 percent in 2007, the total increase in these categories reaches $4.8 billion. This accounts for the lion's share in the growth of 2007's total military spending.

Of course, spending on hardware research and development and weapons procurement has also increased. And the money spent on training and exercises and on maintaining military activities has risen, too. But this kind of spending growth pales beside the increase in personnel expenditures.

It is unlikely that military personnel wages will go up by large margins every year. So, the possibility is extremely low that the country's military spending will increase dramatically in the coming years.

There is another question: Does China's military expenditure outstrip its actual needs now that the 2007 Chinese military budget has surpassed Japan's $42 billion and Germany's $37.5? It still trails Britain's $62.38 billion and France's US$50.78 billion. It is a fraction of the United States' $532.8 billion,

China's military spending falls far behind that of many other countries, whether in terms of actual amount, military personnel per capita expenditure, or the general population per capita military spending.

The country's military budget ranks fourth among the world countries and its GDP also stands fourth in the world. Coincidence? Maybe. I think the two No 4 positions are logically connected to each other.

China is a big country. The military is, therefore, obligated with overwhelmingly heavy tasks in defending the country. To compound this, the country is threatened by separatism, terrorism and hegemonism. In view of all this, China's sizable military spending is totally justified.

My latest research shows that a country would find it hard to achieve military modernization when military personnel per capita spending remains below $100,000.

The US military's per capita budget in 2007, for instance, is $383,000, the highest in the world. Next comes Britain ($324,000), followed by Japan ($175,000), Germany ($148,000) and France ($146,000).

In contrast, China's per capita spending on its soldiers is only US$19,540. The country has set a rather moderately paced timetable by today's international standards to modernize its military forces. Extending to 2050, it covers three stages: from 2006 to 2010, from 2010 to 2020, and from 2020 to 2050.

It is predicted that, during these three phases of military modernization, China's military budget will increase moderately each year to keep up with the country's economic development and its defense needs. This is aimed at closing the wide military strength gaps between the country and the world's military powers.

Does China's military expenditure outstrip its actual defense needs? Facts constitute the best gauge.

Western military analysts are very clear that Chinese fleets, air force, ground troops and strategic rocket forces are on a secondary tier with the world's leading military powers in terms of quality and quantity of its core battle equipment.

The basic facts and stark reality determine that it is impossible for China to enter an arms race with the world's military powers. Most important of all, China's State strategy and military strategy are geared to peaceful development and active defense.

The ultimate goal is to build a harmonious society inside the country and a world in harmony outside. So the country needs no military expansion or a strategy designed for military interference overseas. China has no military bases overseas and the country has never launched pre-emptive attacks against others.

By all measures, Chinese military expenditure is still very humble.

The author is a council member of China Arms Control and Disarmament Association