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China Slows Increase in Defense Spending (Rural Development and Social Spending Compete for Funds; 'It Will Be Harder to Argue About the Chinese Threat')
* The Wall Street Journal
* MARCH 5, 2010
China Slows Increase in Defense Spending
Rural Development and Social Spending Compete for Funds; 'It Will Be Harder to Argue About the Chinese Threat'
By GORDON FAIRCLOUGH
SHANGHAI—China said it will raise its official defense budget 7.5% this year—the smallest increase in two decades—as the government shifts resources toward other priorities, in a move that could also help defuse perceptions of the nation as a military threat.
Li Zhaoxing, a spokesman for China's legislature, the National People's Congress, said the country would spend nearly $78 billion on its armed forces in 2010, up from $72.5 billion last year. That is a sharply lower growth rate than the nearly 19% average budget rise for the People's Liberation Army every year since 2006.
Since 2000, China's declared annual defense outlay has grown more than fourfold. It now exceeds the military spending of the U.K., France and Russia. But it remains a fraction of the more than $690 billion spent on defense last year by the U.S., whose troops are fighting in wars in Iraq and Afghanistan.
China's official military budget is widely believed to significantly understate its actual defense spending. In 2008, for instance, the Pentagon estimated that actual Chinese military spending was between $105 billion and $150 billion. The official Chinese government figure was $60 billion.
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The rapid rise in China's military spending and its development and acquisition of more sophisticated weaponry in recent years has sparked concern in Washington and among China's neighbors, who question Beijing's intentions. China's growing military is already forcing the U.S. and others to reassess their approaches to security in Asia.
This year's military spending increase was significantly smaller than that expected by outside analysts of the Chinese military, many of whom had forecast a rise of roughly 15%. It is unclear whether the slower growth rate will be enough to assuage the worries of Beijing's critics.
"It's a surprise," said David Shambaugh, a professor at George Washington University who studies Chinese military affairs. "There are competing expenditure priorities" for Chinese leaders struggling to develop rural areas, which are falling further behind the nation's booming cities, and to repair a tattered social safety net. "It will be harder to argue about the Chinese threat," if Beijing continues to temper its defense spending increases, Mr. Shambaugh added.
Ni Lexiong, a fellow at the Shanghai National Defense Institute and an outspoken advocate of Chinese sea power, said that the lower defense-spending rise reflects an "easing of the security situation," with improved relations between the mainland and Taiwan, which China views as part of its territory. Mr. Ni also said the government may be trying to "build mutual trust and eliminate the China-threat theory" with more gradual budget increases. He said that Vietnam, India and others had responded to China's stronger military by buying more weapons themselves, and that China doesn't want to spark an arms race in Asia.
"China is committed to peaceful development and a military posture that is defensive in nature," said Mr. Li, the National People's Congress spokesman, in a nationally broadcast news conference Thursday ahead of this year's session of the congress, China's largely ceremonial legislature. He said this year's increase would improve China's ability to "meet various threats."
China's 2.3 million-strong armed forces are far more capable than they were a decade ago. Big improvements have been made in the navy, especially its submarine forces, as well as in ballistic missiles and cyber and electronic warfare, military analysts say. But the country still lacks the ability to deploy any substantial force beyond its periphery, the Pentagon and military analysts say.
For the most part, Beijing has sought to play down the significance of growth in military spending, saying it has been directed primarily at helping the PLA, with its roots in the peasant army that brought the Communist Party to power in 1949, catch up with more technologically sophisticated militaries in Japan and the West.
But increasingly, Chinese leaders also have sought to draw attention to the country's military strength as a source of national pride. On Oct. 1, the 60th anniversary of the foundation of the People's Republic of China, a massive military parade through the heart of Beijing showed off the country's new hardware.
Much of China's modernization effort has been directed at raising the potential cost of U.S. intervention in any conflict between China and Taiwan. But the military's aspirations are broader. The Chinese navy has been pushing farther offshore. Chinese ships have joined antipiracy patrols in the Gulf of Aden. And navy officers talk of one day building an aircraft carrier, which would be China's first.
In 2007, China used a missile to shoot down an orbiting satellite. This year, the PLA said it successfully tested an antiballistic-missile interceptor. The Defense Department believes China is also developing a ballistic missile that it can use to target U.S. aircraft carriers.
A new generation of military boosters is becoming more outspoken. In a new book called "The China Dream," a PLA officer, Senior Col. Liu Mingfu, calls on China to "become world No. 1, the top power" in the 21st century. Senior Col. Liu teaches at China's National Defense University.
Despite their swelling ambitions, however, China's armed forces still have a long way to go as they strive to become a leaner, more agile force using more sophisticated, high-tech weapons, analysts say. That could be one reason for the slowed increase in military spending. The PLA is still learning to effectively use the hardware it has been buying, to train ranks of new, better educated recruits and to build a more professional officer corps.
"Chinese defense spending has reached a very high level," said Chu Shulong, director of the Institute for Strategic Studies at Beijing's Tsinghua University. "Now, the slowing down of growth is more caused by fiscal pressure," he added. "China's government needs to improve people's livelihoods and welfare and spend more on education."
—Gao Sen contributed to this article.
. And so we can go on argueing and speculating, also why these foreigners keep on pushing for ?transparancy". 
