Defense spending at US$35B for 2006
Updated: 2006-12-29 11:33
Both the total amount and per-serviceman share of China's defense expenditure
is low compared with those of some other countries, particularly major powers,
says the White Paper on China's
National Defense in 2006 issued in Beijing Friday. According
to the White Paper, in 2005, China's defense expenditure equaled 6.19 percent of
that of the United States, 52.95 percent of that of the United Kingdom, 71.45
percent of that of France and 67.52 percent of that of Japan. China's defense
expenses per serviceman averaged 107,607 yuan (around US$13,450), amounting to
3.74 percent of that of the United States and 7.07 percent of that of Japan.
"Pursuant to the National Defense Law and the Budget Law, and guided by
the principle of coordinated development of national defense and the economy,
the Chinese government decides on the size and use of defense expenditure in an
appropriate way to meet the demands of national defense in keeping with China's
economic development," the White Paper said.
China's defense expenditure
mainly comprises expenses for personnel, training and maintenance, and
equipment, the White Paper adds.
The White Paper notes that since the
early 1990s, to safeguard its sovereignty, security and unity, and to keep pace
with the global revolution in military affairs, China has gradually increased
its defense expenditure on the basis of its economic development. This increase,
however, is compensatory in nature, and is designed to enhance the originally
weak defense foundation. It is a moderate increase in step with China's national
In the 1980s, the White Paper says, China began to
shift the focus of its work to economic development. At that time, it was
decided that national defense should be both subordinated to and serve the
country's overall economic development. As a result, national defense received a
low input, and was in a state of self-preservation.
According to the
White Paper, from 1979 to 1989, the average annual increase of defense
expenditure was 1.23 percent. However, the defense expenditure actually
registered an average annual decrease of 5.83 percent, given the 7.49 percent
average annual increase of the consumer price index in the same period. From
1990 to 2005, the average annual increase in defense expenditure was 15.36
percent. As the average annual increase of the consumer price index during the
same period was 5.22 percent, the actual average increase in defense expenditure
was 9.64 percent.
"The increased part of China's defense expenditure is
primarily used for purposes such as increasing salaries and allowances of
military personnel and improving their living conditions, increasing investment
in weaponry and equipment and infrastructure, supporting the training of
military personnel, compensating for price rise, and increasing expenses for
international cooperation in non-traditional security fields.
Paper stresses that China practices a strict system of financial appropriation
of defense funds. The PLA's budgeting is based on the defense development
strategy, military building objectives and annual military tasks set by the
state. Budgeting units at each level carry out studies to decide on their budget
items, make calculations of their requests for funds and then report to the
"China practices a strict system of financial
appropriation of defense funds," the White Paper says.
departments are instituted at the General Logistics Department, military area
commands, Navy, Air Force and Second Artillery Force, and units at the levels of
corps, division (brigade) and regiment. These departments are responsible for
the appropriation, management and supervision of the defense funds. The auditing
offices of the state and the PLA conduct strict supervision of the defense
budget, says the White Paper.
The White Paper says that China's defense
expenditure in 2004 and 2005 was 220.001 billion yuan (around US$27.5 billion)
and 247.496 billion yuan (around US$30 billion), respectively, with growth rates
of 15.31 percent and 12.50 percent.
In the past two years, the share of
China's annual defense expenditure in its GDP and in the state financial
expenditure in the same period has decreased, being 1.40 percent and 7.74
percent respectively in 2003, 1.38 percent and 7.72 percent in 2004, and 1.35
percent and 7.29 percent in 2005. Its defense budget for 2006 is 283.829 billion
yuan (around US$35 billion), the White Paper said.
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