China announces 8.1% defense budget boost from 2017 as Xi pursues ‘world-class’ force

by Jesse Johnson

Staff Writer

China announced Monday that it will boost its defense budget 8.1 percent this year from 2017, a larger increase than in the two previous years as leader Xi Jinping seeks to turn the country’s military into a “world-class” force that can venture farther from its shores.

Beijing will spend 1.11 trillion yuan ($175 billion) on its military, according to the budget, which was released before the opening session of the annual National People’s Congress, China’s rubber-stamp parliament, state-run media said.

The figure compares with a 7 percent increase last year and 7.6 percent in 2016, which marked the first time in six years that growth in spending was not in double figures.

Still, those years of double-digit growth have given China the world’s second-largest defense budget after the United States, which has a proposed budget for next year of $716 billion — more than four times the Chinese outlay. In December, Japan’s Cabinet approved a record-high draft defense budget for fiscal 2018 that saw expenditures rise to ¥5.19 trillion (approximately $49.2 billion) from ¥5.13 trillion the previous year.

But China’s actual military spending is widely believed to be much higher than Beijing’s official figures.

In its annual report on Chinese military power, the Pentagon said last year that “total military-related spending for 2016 exceeded $180 billion,” noting that “it is difficult to estimate actual military expenses, largely due to China’s poor accounting transparency.”

This, too, may be skewing on the lower side: The Stockholm International Peace Research Institute (SIPRI) said China spent an estimated $215 billion, or 48 percent of regional spending, in 2016.

Also Monday, Beijing said it was aiming to expand its economy by around 6.5 percent this year, the same pace as in 2017, while pressing ahead with its campaign to reduce risks in the financial system, Premier Li Keqiang said.

The goal was kept unchanged even though the economy grew 6.9 percent last year, exceeding the government’s target.

Economists had already expected the world’s second-largest economy to lose some momentum this year as the government deepens its push to contain a build-up in corporate debt, while a war on pollution and a cooling property market weigh on its manufacturers.

On Sunday, NPC spokesman Zhang Yesui said Chinese defense spending as a share of GDP and the budget remains lower than that of other major nations, vowing that China would adhere to a “path of peaceful development.”

“With a defense policy that is defensive in nature, the development of China will pose no threat to any other country,” he said.

Under Xi, China’s military has undergone a massive modernization push to turn it into one that can protect China’s interests at a time when disputes are growing with the U.S., its neighbors and old foe Japan. The Chinese leader has also unleashed an anti-corruption campaign that has taken down potential rivals among the military’s top brass.

The focus on creating a more potent fighting force has seen Beijing pour cash into projects such as a second aircraft carrier, integrating stealth fighters into its air force and fielding an array of advanced missiles that can strike air and sea targets from long distances.

Besides approving the government’s budget, the NPC was also expected to appoint Xi to a second term as president while also repealing constitutional term limits that require him to step down in 2023.

Such an amendment could give Xi more time to push a key pledge he made in October to complete China’s restoration as a global power by 2049, the 100th anniversary of the founding of China’s ruling Communist Party.

The push has not gone unnoticed in Washington.

The Trump administration has expressed concern about China’s growing military and economic clout, labeling the country a “revisionist power” intent on disrupting the current global order.

“As China continues its economic and military ascendance, asserting power through an all-of-nation long-term strategy, it will continue to pursue a military modernization program that seeks Indo-Pacific regional hegemony in the near-term and displacement of the United States to achieve global preeminence in the future,” said the U.S. National Defense Strategy, which was published in January.

Tokyo has also looked on warily as Beijing has poured funds into defense coffers and regularized the reach of its People’s Liberation Army with training exercises that have seen it slip through international airspace near Japanese territory.

Experts say that is unlikely to change.

“The increase in budget, which in large part goes toward the continued modernization and structural reforms of the PLA, will also mean more funding to sustain the recent increase in operational tempo,” said Collin Koh, a specialist in regional naval affairs at Singapore’s S. Rajaratnam School of International Studies.

“By that, it not only refers to exercises but also those operational and training sorties undertaken by air and naval assets in ‘far seas’ areas,” Koh said. “This would mean keeping up with the frequency of appearances of aerial formations and naval flotillas of varying sizes transiting through waters of strategic concerns to Japan, such as the Miyako Strait.”

A strategic gateway into the western Pacific Ocean, the Miyako Strait is a thin stretch of sea and airspace about 250 km wide in the East China Sea, located between Miyako Island and Okinawa’s main island in the prefecture of the same name.

Media reports last week said the Japanese government is considering deploying a surface-to-ship missile unit to Okinawa’s main island as part of a bid to beef up defenses in response to Chinese maritime assertiveness.

Tokyo is already proceeding with a plan to install a surface-to-ship missile unit on Miyako Island to bolster its defenses against threats to remote islands in the southwest. But it believes the main island should also have a unit as Chinese naval ships have frequently passed through the Miyako Strait.

Koh said China would also likely continue to send a variety of government-backed vessels and aircraft into the area near the Japanese-controlled Senkaku Islands, which are also claimed by China, where they are known as the Diaoyu. The Senkakus, about 210 km from Miyako Island, are also in the East China Sea.

“I believe Japan would also have to brace for intensified use of various other assets around the area, including the Senkaku Islands,” said Koh, adding that these Chinese vessels could include intelligence-collection ships “and, following the incident off the isles in January, more submarine activities.”

China sailed an advanced stealthy nuclear submarine close to disputed islands earlier this year, a move lambasted by Tokyo.

Koh said Japan was now looking at ways to better deal with the growing entanglements.

“To cope with the foreseeable intensification of PLA movements in the area, the JSDF (Japan Self-Defense Force) is likely not just looking at improving its expeditionary force projection capabilities, such as mulling F-35Bs on board the helicopter destroyers, but also enhancing its maritime domain awareness, including new surveillance radars, improved undersea hydrophone arrays, remote-sensing and unmanned capabilities,” he said.

Information from Reuters added