China's Defense Spending to Expand at Slowest Pace in Six Years

  • Military budget increases 7.6%, compared with 10.1% in 2015
  • PLA delegation mum as National People's Congress gets underway

China’s military budget will grow at the slowest rate in six years as President Xi Jinping overhauls the military and a slowing economy constrains spending.

Central government defense spending was projected to increase 7.6 percent to 954.4 billion yuan ($147 billion) compared with a 10.1 percent rise last year, the Ministry of Finance said Saturday in its budget report to the National People’s Congress. That’s the smallest jump since the military budget increased 7.3 percent in 2010.

Xi Jinping leaves following the opening of the fourth session of the 12th NPC

Photographer: Qilai Shen/Bloomberg

The weakest economic growth in a quarter century is squeezing China’s budget as Xi implements the most sweeping military overhaul in decades. The plan to modernize the 2.3 million-member People’s Liberation Army includes cutting 300,000 personnel and breaking up the military’s back-office bureaucracy.

The state-run Global Times newspaper said in an editorial Saturday that slower defense spending was consistent with economic needs, even if the figure might disappoint some Chinese.

"The Chinese government does not want to irritate other countries and trigger an arms race," the paper said. "Domestically, the government does not want to make its people anxious, as if major military conflicts are pending."

The central government’s share of public security spending was expected to increase by 5.3 percent to 166.8 billion yuan, according to the budget report. That compares with a 7.2 percent rise last year.

U.S. defense spending still dwarfs China’s, even after a decade of double-digit growth. The Pentagon’s $585 billion budget for 2016 -- partly shaped by a push to counter China’s advancing capabilities -- is roughly four times what China intends to spend. Military outlays would likely represent about 1.3 percent of the Chinese economy in 2016, compared with 3.1 percent for the U.S.

Xi’s military revamp is aimed at unifying the army, navy, air force and a new rocket force under a U.S.-style joint command system, enabling the armed forces to better defend China’s sovereignty at home and its growing interests abroad.

PLA Delegation

The overhaul comes as Xi’s anti-corruption campaign ripples through the ranks, with the PLA’s retired top uniformed officer, Guo Boxiong, expelled from the Communist Party in July pending prosecution on graft allegations.

The PLA’s delegation to the NPC entered the Great Hall of the People as a group on Saturday, while military officers prevented reporters from asking them questions, telling them to apply online for interviews. 

"Very few military delegates will be willing to talk to you," Song Xuan, a military officer with the PLA’s political department, told Bloomberg News. Asked to explain the policy, he said because "a lot of things happened over the past year."

Arms Buildup

Increased spending has allowed the PLA to better project force and has contributed to rising tensions in the region, particularly in the contested South China Sea. The U.S. has begun sailing warships near disputed islands in "freedom-of-navigation" operations to challenge Chinese claims to the area, where Beijing is reclaiming land and building military facilities it says are for defensive purposes.

The Philippines and Vietnam -- spooked by China’s island-reclamation program in the disputed South China Sea -- are both increasing defense spending. India plans to spend at least $61 billion to expand its navy, eyeing Chinese submarine patrols in the Indian Ocean. 

Full Coverage: China National People's Congress 2016

China’s military growth combined with heightened territorial tensions will propel the Asia-Pacific region to the top rank of global military spending by the end of the decade, accounting for one in every three dollars spent on defense by the end of 2020, up from one in five in 2010, IHS Jane’s forecast last month.

— With assistance by Brendan Scott

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