Flattops come with benefits
By Wang Baokun (China Daily) Updated: 2011-08-19 07:57China has developed its first aircraft carrier by refitting Varyag, an old Soviet flattop. But it has left some people worried whether the country's economic growth will continue to be strong enough to support the building of aircraft carriers in future and whether such a move will create enough economic benefits.
An aircraft carrier reflects a country's economic strength, technological development level and equipment manufacturing capacity. The cost of building an aircraft carrier depends on factors such as its quality, standard and design, the level of technical research and development and labor cost. It also depends on the era, building period and a country's economic and industrial development levels.
International experience shows that building aircraft carriers imposes a rather high demand on a country's economy. For example, a US Nimitz-class aircraft carrier costs about $4.5 billion. The maintenance cost during its 50-year service is about $12 billion, and the cost of fuel, about $6 billion. The maintenance cost of other vessels in an aircraft carrier's formation is about $7 billion, and about $20 billion is needed to replace the shipboards twice. If we take devaluation and technological reform into consideration to be 20 percent of the overall expenditure, the cost of a Nimitz-class flattops during its 50-year life cycle would be about $60 billion, that is, $1.2 billion a year.
The current US navy expenditure is more than $149 billion, with the costs of flattops being more than $16 billion and maintenance about $4.2 billion.
China paid $20 million for the old Varyag. The foreign media estimates that the total cost of a Chinese aircraft carrier, along with its formation ships and including transportation, refitting, equipment loading, operational aircraft, maintenance and disposal after decommissioning would be about $10 billion.
Whether such a high military expenditure be a drag on the Chinese economy can be evaluated on the basis of two key indicators: whether the proportions of the military budget in GDP and fiscal expenditure are below the generally accepted "safe levels" of 4 percent and 20 percent.
Last year, China became the second largest economy in the world with a GDP of $5.98 trillion. As the largest economy in the world, the US' GDP last year was $14.62 trillion.
According to The Wall Street Journal, the military expenditures of the US and China last year was about $698 billion and $119 billion, which accounted for 4.8 percent and 2.1 percent of their GDP. World Bank figures show that, from 1988 to 2009, the proportion of the US' military expenditure in GDP fluctuated between 3 and 6 percent, while that of China was about 2 percent. And according to data provided in China Statistical Yearbook, the proportion of the country's military expenditure in GDP in the past 10 years was about 1.5 percent, and from 1985 to 2010 the proportion of military expenditure in fiscal expenditure was about 8 percent.
On July 8, the US passed a $649-billion defense budget for next year. If we add the nearly $33-billion budget for nuclear weapons' project and army infrastructure construction, the US' total military budget would be $682 billion, or 18 percent of its fiscal expenditure even when it is facing a crisis.
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