China’s Military Spending

Dhruva Jaishankar

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When assessing China’s military spending and modernization, we should keep six things in mind. First, China’s official military spending figures are questionable, with many independent estimates suggesting that it already spends in excess of $200 billion on its military each year. Although the People’s Liberation Army (PLA) has become somewhat more transparent over the past two decades, the exact annual defence budget should be taken with a grain of salt.

Two, until about 2020 the PLA will be undertaking perhaps its most radical modernization drive since 1949, shrinking the size of its ground forces by about 300,000, increasing the relative weight of its air force and navy, and improving joint theatre-level command and control structures. In short, the PLA is evolving into a modern, war-fighting, and offensive-oriented force.

Three, despite spending increases, China’s ability to import defence equipment and technology is still limited by export controls and arms embargoes. Russia and the former Soviet republics are the largest exporters to China over the past five years, with sensors, missiles, and aircraft among the equipment provided. However, the fact that China’s arms imports have steadily decreased over the past 15 years points to its growing defence industrial capabilities, helped in part by reverse engineeringand technological theft.

Four, as recently as 2013, China spent more on internal security than on defence (local security spending from 2014 onwards has not been fully divulged). This includes funding for entities such as the Ministry of State Security (intelligence) and Ministry of Public Security (law and order), whose functions partly contribute to national defence. But equally, this indicates Beijing’s continuing concerns about its vulnerability to domestic unrest.

Five, despite its greater resources, the PLA of today has never fought a war. Gen. Zhang Youxia, Vice Chairman of the Central Military Commission, is among the few remaining officers with battle experience (against Vietnam). This is in stark contrast to the United States, which has been battle-hardened (and fatigued) from almost constant warfare in the Gulf, Balkans, Afghanistan, and Iraq. Considering the rising tide of jingoism, the PLA’s inexperience suggests that it is an adolescent andpotentially trigger-happy force, one that is as likely to drag a country into conflict as it is to prevent one.

Six, rather paradoxically, the PLA remains a force of last resort—for now. The recent pattern of Chinese assertiveness – whether in the East China Sea or in the Himalayas – has often involved a three-tier approach. It is led by apparent civilians, such as armed fishing vessels, dredging ships, or road building crews, who are backed up by paramilitary or law enforcement forces such as coast guard vessels and border security. The PLA itself offers a large latent threat, but one that has (so far) barked more than it has bitten. In fact, information, psychological, and legal warfare and economic coercion remain at the pointy end of China’s spear.

What is without doubt is that China has the second-most potent military today after the United States, and this represents the degree to which Beijing has become a peer competitor to Washington as a global power. Its ability to play an offensive role in future conflicts has increased. This is obviously a concern for countries along China’s periphery, particularly those with which it has outstanding territorial disputes. These include Japan, South Korea, Taiwan, Vietnam, the Philippines, Malaysia, Brunei, Bhutan, and India. China’s growing military profile also directly involves the United States, which is a resident power in the Western Pacific with alliance commitments to five countries. For all these actors, China’s increased military spending, capabilities, and assertiveness will require continued vigilance, confidence-building measures, and exhortations for greater transparency. At the same time, it will necessitate better defence preparedness, stronger alliances and partnerships to raise the potential costs of Chinese military adventurism, and if necessary the resolute and appropriate application of force.