Defense expenditure at 'reasonable level'

(Xinhua)
Updated: 2009-01-20 14:05

China's defense expenditure has always been kept at a reasonable and appropriate level, according to a white paper issued on Tuesday.

The white paper on China's National Defense in 2008, issued by the Information Office of the State Council, says in the past three decades of reform and opening up, China has insisted that defense development should be both subordinated to and in the service of the country's overall economic development.

"Guided by the principle that defense expenditure should grow in line with the demands of national defense and economic development, the Chinese government decides on the size of defense expenditure in an appropriate way, and takes a road of national defense and armed forces modernization featuring lower cost and higher efficiency," it says.

From 1978 to 1987, as the nation shifted its focus to economic development, national defense received a low input and was in a state of bare sustenance. During this period the average annual increase of defense expenditure was 3.5 percent, while that of GDP was 14.1 percent and that of the state financial expenditure was 10.4 percent. The shares of China's annual defense expenditure in its GDP and in the state financial expenditure dropped respectively from 4.6 percent and 14.96 percent in 1978 to 1.74 percent and 9.27 percent in 1987.

From 1988 to 1997, to make up for the inadequacy of defense development and maintain national security and unity, China gradually increased its defense expenditure on the basis of its sustained economic growth. During this period the average annual increase of defense expenditure was 14.5 percent while that of GDP was 20.7 percent and that of the state financial expenditure was 15.1 percent. The shares of China's annual defense expenditure in its GDP and in the state financial expenditure continued to drop.

From 1998 to 2007, to maintain national security and development and meet the requirements of the Revolution in Military affairs (RMA) with Chinese characteristics, China continued to increase its defense expenditure steadily on the basis of its rapid economic growth. During this period, the average annual increase of defense expenditure was 15.9 percent, while that of GDP was 12.5 percent and that of the state financial expenditure was 18.4 percent.

"Although the share of China's defense expenditure in its GDP increased, that in the state financial expenditure continued to drop on the whole," says the paper.

In 2007, the defense expenditure was used to cover the expenses of the active force (RMB343.439 billion), the reserve force (RMB3.693 billion) and the militia (RMB8.359 billion). China's defense budget for 2008 is RMB417.769 billion.

The paper says in the past two years, the increased part of China's defense expenditure has primarily been used for the following purposes: (1) Increasing the salaries and benefits of servicemen; (2) Compensating for price rises; (3) Pushing forward the Revolution in Military affairs(RMA).

"Both the total amount and per-service-person share of China's defense expenditure remain lower than those of some major powers," says the paper.

In 2007 China's defense expenditure equaled 7.51 percent of that of the United States, 62.43 percent of that of the United Kingdom. China's defense expenses per service person amounted to 4.49 percent of that of the United States, 11.3 percent of that of Japan, 5.31 percent of that of the United Kingdom, 15.76 percent of that of France and 14.33 percent of that of Germany. As for the share of defense expenditure in GDP, that of China was merely 1.38 percent, while that of the United States was 4.5 percent, that of the United Kingdom 2.7 percent, and that of France 1.92 percent.

The paper says the Chinese government has established defense expenditure reporting and publishing mechanisms. Since 1978 the Chinese government has submitted a financial budget report to the NPC and published the total amount of the defense budget each year.

It says the relevant data of China's defense expenditure has been made public in the China Economy Yearbook since 1981, and in the China Finance Yearbook since 1992. And since 1995 the composition and main purposes of China's defense expenditure have been published in the form of government white papers.