China hikes defense budget by 8.1 percent

By Li Ruohan (Global Times, 5 February 2018) –  China increased its 2018 defense budget by 8.1 percent to 1.1 trillion yuan ($175 billion), the third year that the country raised the budget by single digits, which analysts believe will become standard.

The budget increase, released in a budget report submitted to the first session of the 13th National People’s Congress on Monday, is slightly higher than the 7 percent hike in 2017 and 7.6 percent in 2016. This year’s budget marks the third consecutive year of a single-digit military budget growth.

China increased its military spending by 10.1 percent in 2015, 12.2 percent in 2014 and 10.7 percent in 2013.
The single-digit growth will become a normal situation, said Song Zhongping, a Chinese military expert and TV commentator.

Echoing Song, a Beijing-based military expert who requested anonymity told the Global Times on Monday that the budget is decided by the security situation China faces domestically and internationally.

The budget also depends on China’s economic development and comprehensive national power, the anonymous expert said.

As China slightly slowed down its economic growth, the national defense budget was set at a safe level, he added.

The defense budget accounts for less than 1.5 percent of Gross Domestic Product (GDP) and the per capita expenditure is also lower than other major countries in the world. This shows China insists on peaceful development and a defensive strategy, Song said.

China’s defense spending in 2017 was 1.02 trillion yuan, 1.2 percent of the GDP of the same year, a ratio experts said is “safe and healthy” for China.

China’s defense budget is only one-fourth that of the US. The US defense budget of $700 billion for 2018 and $716 billion for 2019 was approved by the US Congress in early February.

Weapons upgrade

As China furthers its military reform and modernizes its troops, the country will spend the money where it matters most, such as on upgrading weapons and front-line troops, Song said.

A significant part would be spending on a new type of aircraft carrier, air force jets, missiles and cyber weapons, Li Daguang, a professor at the PLA National Defense University in Beijing, told the Global Times.

The cost of domestically-built weapons alone will account for a big share of the budget, he said.

The purchase of a fighter formation, consisting of domestically built fighter jets, will cost at least 20 billion yuan, and the overhaul of weapons in an armored division in China costs around 15 million yuan, Li said.

Experts noted that the maintenance and use of military equipment, together with the cost of training, also forms a large share of the expenditures.

It will take around 15 million yuan to fill the oil tank of the Liaoning aircraft carrier, and a drill of the carrier fleet will cost around 50 million yuan, Li added.

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