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Interpreting China's Defence Budget

China has been known to spend huge amounts on defence. Yet the tenacity with which this is being done has unnerved defence analysts all over the world. The recent announcement by China that it would raise its defence budget by 17.8 percent to roughly 350 billion Yuan or just under $ 45 billion has revived old concerns about China's intentions.

Officially, China has renewed its commitment to a path of peaceful development and a defensive military posture, claiming that the new spending would be dedicated to increasing salaries and benefits for soldiers as well as overall modernisation and technological upgrades. However, there are few takers for Chinese assertions. US Deputy Secretary of State John Negroponte was one of the first to express concern over the China's defence budget and intentions. Similar concerns were expressed by Japanese and Taiwanese officials.

Though China's defence outlays have been increasing in double digit since 1990, averaging 15 percent, the proposed defence budget marks the biggest increase since the 19.4 percent hike in 2002. The success of economic reforms allowed the regime to be liberal towards the PLA. Most analysts, apart from the CIA and authoritative international publications, believe that China spends at least two to three times on defence than shown in its official estimates. This gives a figure of $ 100 billion, making China the largest spender in Asia and second after the US.

The titanic defence budget only adds to China's deceptive intensions in the Asia Pacific region. A close scrutiny of China's White Paper on Defence published in December 2006 reveals the Chinese discomfort with the regional security environment, in particular the domineering presence of US. The US has not only perpetuated its military alliance with Japan but has also added to the Taiwanese resistance to China. Last month, China protested when the US decided to approve the sale of missiles worth $ 421 million to Taiwan.

China is investing huge funds to project their military power in the region. As the white paper itself mentions, China is pursuing a three step development strategy in modernising its armed forces. The first step is to lay a solid foundation by 2010, the second is to make major progress around 2020, and the third is to reach the strategic goal of building informationised armed forces capable of winning informationised wars by the mid-21st century.

In the process, Chinese military modernisation is rapidly assuming an offensive posture. Already, the number of missiles deployed facing Taiwan is nearing 1000. It is also developing J-10 fighters to tackle the Taiwanese Air Force. But Taiwan seems to be a stop-gap arrangement; it seems China is preparing for a bigger theatre. It is no longer a continental power; the Chinese PLA is assuming maritime dimensions with growing clout in Asia. The recent shooting down of a weather satellite with a ground-based missile has put China in the category of space powers. Increased military might could induce China to engage its neighbours in 'coercive diplomacy' over contentious issues and force solutions of its choice.

The present hike in defence budget is, therefore, part of China's long term objective of seeking a superior military vis-?-vis its neighbours, if not the US. Unfortunately, while Chinese military modernisation has been studied with anxiety and concern by scholars everywhere, their Indian counterparts have turned a nelson's eye. We continue to be fascinated by an 'economic' China despite being the victim of a Chinese military offensive in the past. Little effort has been made to establish a correlation between an unresolved border and Chinese military options.

The Chinese defence budget has important lessons for India. First, if India is to emerge as a great power, economic and political goals should be backed up by a greater support for military modernisation. Lack of convergence will only undermine India's great power ambitions. Second, the Chinese experience shows that defence and development are not mutually exclusive. Let us not forget that the double digit growth in Chinese defence over a decade and half came when the economy was also growing at 9 percent per year. Third, comprehensive and across the board military modernisation will not serve our security interests. Rather, following in Chinese footsteps, the focus should be on selective modernisation, keeping in view country specific threats.

The Chinese experience also shows that while more money facilitates rapid military modernisation, there is no escape from resource management, force reduction and rationalisation of teeth-to tail ratio. In recent times, China has been recognised not only for giving a technological push to its PLA but also pruning it in the process from a peak of 4.7 million to 2.3 million men. Probably, there is a lesson to be learnt from the Chinese experience in defence budgeting and military modernisation.

Note: The views expressed herein are those of the author and do not reflect those of the Government.