Chinese Communist Navy warships and warplanes participate in a military show in the South China Sea. (April 12, 2018)
The Communist Party of China (CPC) government recently announced a defense spending budget of RMB 1,379.544 billion for 2021, a 6.8 percent increase from last year. Chinese scholars believe that this rate of adjustment is reasonable. Some observers believe that while the CCP’s defense budget is a step closer to Xi Jinping‘s “dream of a strong military,” it also reveals that the “military-civilian integration” and “military-economic integration” are used to stimulate the domestic economy. The military and economic fusion to stimulate internal circulation and boost the domestic economy will not only fail to “strengthen the military and enrich the country”, but may also “strengthen the military and mislead the country”.
During the two sessions, Wu Qian, spokesman for the Chinese PLA and Armed Police Force delegation, said in an interview with the media on March 7 that China’s defense spending continues to grow moderately and steadily, with a national defense expenditure budget of 1379.544 billion yuan in 2021, including 135.534 billion yuan ($209 billion) at the central level, an increase of 6.8 percent over last year.
According to CCTV news, Chinese Communist Party President Xi Jinping said during the two sessions that the current security situation in China is unstable and uncertain, and the entire military should coordinate the relationship between construction and preparation for war, be ready to deal with various complex and difficult situations, and resolutely safeguard national sovereignty, security and development interests. The Global Times reported that the growth of China’s defense budget has been “sustained and stable in a rational way,” and mentioned that defense spending is not a mere investment, but will yield a peace dividend.
Defense budget doubles in 10 years
Su Ziyun, director of the Institute of Military Strategy and Industry at Taiwan‘s National Defense and Security Research Institute (Photo by Kyun Chen, Voice of America)
In an interview with Voice of America, Su Zi-yun, director of the Institute of Military Strategy and Industry at Taiwan’s Institute for Defense and Security Studies, said that if you compare China’s defense budget to the 669.2 billion yuan budget when Xi Jinping took office in 2012, China’s defense budget has doubled in 10 years, not including the hidden “black numbers.
If you take international security think tanks such as the Stockholm Peace Research Institute in Sweden, he said, China’s actual defense budget is 1.4 times higher than the official announcement, at 1,897.4 billion yuan ($294 billion). If the real purchasing power of the yuan is converted to about 1.57 times that of the U.S. dollar, the “equivalent” Chinese defense budget would be a massive $461.7 billion.
Su Ziyun said, “It is worth noting that since Xi Jinping came to power in 2012, the current defense budget has increased by a factor of one in 10 years, and this situation is an indication that Xi’s dream of a strong military, which he is serious about executing, should be more alert to neighboring countries and democratic countries.”
According to Canada‘s Kanwa Defence Review, China has been engaged in the development of many new weapons systems, including a new generation of aircraft carriers, intercontinental ballistic missiles, and other sophisticated softwares; however, none of these expenditures are listed in the budget.
According to a commentary in Taiwan’s Wang Daily, Western countries are highly concerned about the use of China’s military budget and the so-called hidden budget issues, which are at the root of the “China threat theory” in the West.
Some analysts point out that in the past year, China has been in constant conflict with neighboring countries, such as the bloody conflict with India in the Garhwan Valley, and the increased tension with the United States and other countries in the South China Sea, and with Japan in the East China Sea. In addition, the Taiwan Strait has recently become even more unsettled, with Chinese warplanes taking off and landing frequently. If we compare this to what Chinese Premier Li Keqiang said at the opening of the National People’s Congress, “The People’s Liberation Army will enhance its armaments to better defend its borders,” it highlights the possibility that China’s military spending will be used for geostrategic purposes.
Gaining geopolitical leverage
Su Ziyun believes that in addition to training a modern army and acquiring new weapons and equipment to reach Xi Jinping’s goal of building an army for 100 years by 2027, China also hopes to gain geopolitical leverage through military expansion, especially in terms of force projection capabilities.
He said that since 2012, Xi has built about 105 new destroyers and patrol ships, two aircraft ships, and eight amphibious assault ships, greatly increasing the force projection capability and giving Beijing the actual size of a “blue-water navy” (a navy with expeditionary capabilities). At the same Time, it has also rapidly developed a fleet of heavy transport aircraft, such as the Yun-20, and a fleet of straight-20 transport helicopters, in order to establish strategic transport and rapid deployment capabilities, and at this stage, it can conduct modern regional operations in the surrounding area. Such military power, although not yet able to immediately change the status quo in the Taiwan Strait and East China Sea, can support Beijing’s political and economic needs in the South China Sea and the Belt and Road.
Su Ziyun said the goals of China’s defense budget growth are: “The first one is a political demand, and since 2027 is Xi Jinping’s stated goal of building the military for 100 years, they will try to accomplish it. The second will be used to increase its geostrategic leverage, especially force projection, which is key to Beijing’s future Belt and Road or Indo-Pacific strategy. The third is to strengthen nuclear strike capabilities and counterattack capabilities, including the new 096 submarine ship, which can operate in the Arctic ice, and the new JL-3 submarine-launched ballistic missile, which can cover the U.S. mainland more effectively and shorten the launch time. This is an important strategic tool that Beijing believes is needed to balance the U.S. in its strategy of deterrence.”
The Military Balance 2021 report released by the International Institute for Strategic Studies (IISS) in London in late February noted that despite the severe impact of the Epidemic and the contraction of the global economy in 2020, military spending by all countries remained almost at the same level as the previous year, indicating rising security competition. This indicates rising security competition, especially in the Indo-Pacific region, and that this trend will not be reversed in the near term, as no one can guarantee that the security environment in the Indo-Pacific region will ease anytime soon.
China’s military faces many risks and challenges
Ni Yongjie, editor-in-chief of Taiwan Strait Studies and deputy director of the Shanghai Institute of Taiwan Studies, told Voice of America, “China has a lot of military expenditures to spend, and faces a lot of risks and challenges in defense and military affairs, including those in the Yellow Sea, East China Sea, Taiwan Sea, and southwest China. So I see the appropriate growth of military spending in the National People’s Congress unanimously passed, is supported by the majority of NPC deputies, but also in line with the needs of our national defense and armament construction, but also in order to achieve earlier the overall requirements of a more elite modernization of national defense, I hope the supporting consistent.”
Ni Yongjie said that China’s military spending only accounts for a maximum of 2 percent of China’s GDP, which is considered relatively low if compared with the United States, Russia, the United Kingdom or other European countries. The U.S. defense budget of more than 700 billion U.S. dollars, China only more than 200 billion U.S. dollars, the U.S. military spending the world’s first, is ranked behind it the second to the total defense budget of the tenth country, is really “great”.
He said, China’s military modernization alone will cost a lot of money, plus a variety of aerospace projects, combat aircraft, early warning aircraft, rocket forces need new missiles, a variety of equipment, research and development, manufacturing are very “burning money”.
Lin Yingyou, assistant professor at the Institute of International Affairs and Strategic Studies, National Chung Cheng University, Taiwan (Photo by Chen Yun, Voice of America)
Lin Yingyou, an expert on the Chinese People’s Liberation Army and an assistant professor at the Institute of International Affairs and Strategic Studies at Taiwan’s National Chung Cheng University, said in an interview with the Voice of America that China’s large military equipment such as aircraft carriers cost a lot of money, and even after construction is completed, the subsequent maintenance is a major expense. In addition, the enhancement of military welfare also costs a considerable amount of money.
Civil-military integration stimulates internal circulation
Taiwan’s National Defense and Security Research Institute’s Director of Military Strategy and Industry Su Zi-yun said that China’s military spending also raises the economy, stimulates the internal circulation, and strengthens the military and enriches the country. He said, according to the statistics of Beijing Investment and Research Institute, Chinese private enterprises account for about 30 percent of the market in the supply of armaments, which translates into China’s public military expenditure, the equipment cost is about RMB 410 billion, so the scale of “civil participation in the military” is about RMB 133 billion. In contrast, the government and state-owned enterprises have invested a total of RMB 313.4 billion in investment funds related to “civil-military integration”, while the private sector and private equity funds have invested RMB 8.24 billion. Therefore, the Chinese government’s defense budget investment still hopes to play an “economic multiplier” effect, helping its industry to maintain a certain amount of domestic demand momentum.
Su Ziyun said: “It (China) uses military development to drive the economy, that is, under the impact of the epidemic and the effects of the U.S. trade war, it uses this ‘military-civilian integration’ perspective to drive some domestic economic demand, or even ‘military-economic integration. It is a strategy of military and economic integration, so it is a ‘strong army and rich country’, which is different from the previous ‘rich country and strong army’. ‘Enriching the country and strengthening the army’ is the policy since Deng Xiaoping to make the country’s economy before investing in the military force (of the country), and under the epidemic and trade war, Xi Jinping in turn can drive the defense industry while developing the military.”
Ni Yongjie, deputy director of the Shanghai Institute of Taiwan Studies, also said, “China’s military spending growth is related to the call inside the 14th Five-Year Plan for ‘enriching the country’ and ‘strengthening the military’ to be raised simultaneously, that is, to promote defense strength and economic strength to be raised simultaneously. Meaning that economic development is placed in the country’s defense construction, the cost of military construction, to synchronize the development, so this year made some adjustments, the appropriate increase in funding, is more reasonable.”
Strong military to enrich the country or strong military to mislead the country?
Xia Ming, a professor of international political economy at the City University of New York, said that Chinese state-run enterprises are the “eldest son” of the People’s Republic of China to Xi Jinping, while the military industry is the “crown prince” of the republic, which is one “grade” higher than the eldest son. The military industry is the “crown prince” of the Republic, one “level” higher than the eldest son, and of course the military industry wants to obtain more resources and make more weapons through the state’s drive. The problem is that China’s military industry is a state-run enterprise, which is not as flexible and autonomous as the private sector in the United States, and is used for civilian purposes on weekdays, but is immediately converted to national defense in times of war. Therefore, although China wants to achieve “civil-military synergy,” it is questionable how likely and efficient it is for the military industry to penetrate and convert to the private industry.
Xia Ming said, “So I think the Chinese government may be wishful thinking that it can strengthen the military and then enrich the country, but I am afraid that the economic cost-benefit calculation of strengthening the military may not be very satisfactory; on the contrary, I think that strengthening the military may be a mistake for the country. The Chinese military-industrial complex, state-run enterprises kidnapped China’s decision is obvious, because China has now moved towards a greater oligarchy, so the expansion of China’s military power, the militarization of the economy, will also form a vicious interaction with China’s nationalism, militaristic belligerence, I think to what extent will put China’s development, militarism towards the road of suicide and extinction. “
In response to a recent CNN report that by the end of 2020, China’s navy will have 360 combat ships, forming the world’s largest naval force, Su Ziyun, director of the Institute of Military Strategy and Industry at Taiwan’s Institute for National Defense and Security Studies, said that China still has a way to go compared to the West’s modern military, both in terms of management and in terms of the substantial proper rate of troops. The Chinese navy may be growing rapidly, as the U.S. Department of Defense says, but if we analyze the effectiveness of these ships carefully, we will find that their combat capabilities are not comparable to those of the U.S. military, and we can only use the adjective “large but not strong” to set a temporary tone for the current Chinese navy.
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