Policy Alert #23 | March 29, 2012

Earlier this month, China announced an 11.2% increase in its official defense budget, bringing the total figure to $110 billion (RMB 670 billion). Although this increase did not come as a surprise, the announcement still drew wary responses from India, Japan and Russia, which we examine in this Policy Alert.

CHINA

The message in the officially-sanctioned press was consistent across the board: China’s increasing military budget is in line with the nation’s overall economic growth, military modernization is necessary for responding to increasingly complex security challenges, and China is committed to peaceful development.

• Wen Bing, a researcher with the People’s Liberation Army, further emphasized that China will not join any form of arms race.

The Global Times elaborated on this rationale in several pieces:

• “The US ‘return to Asia’ has created a disturbance in China and neighboring countries. The fast growth of Asian military budgets is related to this factor,” stated the paper in an editorial.  On a related note, Li Jie of the PLA’s Naval Research Institute argued, “Exaggerating China’s military power could help scare small countries around China and force them [to rely] more on the US.”
• Wei Guoan, a military strategist in Beijing, was also defensive: “If we are strong enough, I don’t think other countries would be as bold today in violating our territory,  such as in the South China Sea.“

INDIA

India is also reviewing its defense budget for 2012-13, which the government announced will be $38.5 billion (1.93 trillion rupees), or about one-third the size of China’s military spending. It was also reported that a high-level defense meeting had a special focus on China and Pakistan, in addition to internal security issues.

• While noting that India’s budget is up 13.1% from last year, the Hindustan Times urged the government to “prioritize defence acquisitions to fast track what we critically need…rather than buying what is readily available so as to spend the budget.”

This increase, though, is not without strains on other fiscal needs. Before it was announced, the Economic Times had reported that “the symbolic reminder of China’s official military budget crossing $100 billion couldn’t have come at a worse time for India that is seeing a series of steps to curtail defence spending due to mounting fiscal crisis.”

• C. Uday Bhaskar, former director of the Institute for Defence Studies and Analyses, praised the “clarity and determination” of China’s political leadership in modernizing its military. “A complete contrast is visible in India, [in which] no political stakeholder seems to have such levels of commitment to national security.”
• In the same ETarticle, unnamed military officers also voiced support for indigenous military production, as well as a greater role for the military in national decision-making processes.
• According to another ET article, “Outgoing army chief VK Singh has cautioned that the war-waging capability of the army has been hamstrung by long delays in procurement decisions.”

Some commentary discussed broader geopolitical implications:

• C. Raja Mohan, known for his great-power realist views, wrote in the Indian Express: “China’s rising military expenditure is beginning to have an impact on the Asian balance of power, long before Beijing acquires military parity with Washington. …. To achieve its immediate political objectives, China does not have to match the United States weapon-to-weapon or equal its defence spending dollar-to-dollar. All it needs to do is to alter the local East Asian balance of power against the United States.”

On the transparency of China’s military budget:

• Srikanth Kondapalli of Jawaharlal Nehru University questioned India’s officials and suggested, “Western estimates say the actual figure should be at least double, although Indian estimates place the budget at $150 billion rather than the Pentagon’s $220 billion figure.”

JAPAN

Government officials and Japan commentators voiced disquiet over China’s double-digit military budget increase while simultaneously calling on China to exercise greater responsibility by making its military spending more transparent.

• Top government spokesman Osamu Fujimura expressed concern over China’s military budget increase, urging China to “boost transparency through an exchange of dialogue in the field of security.”
• An editorial in the Yomiuri Shimbun concurred, asserting that the opacity of China’s military spending “leaves Japan with no alternative but to maintain its vigilance” and “strengthen the Japan-U.S. alliance to boost its deterrent power. “
• Citing a “high ranking Chinese military officer,” the Asahi Shimbun stated that China’s actual defense budget for fiscal year 2011 was about 1.7 times higher than the officially announced figure. Thus, the Asahi predicts, “the actual amount earmarked for the Chinese military is almost certainly considerably larger [than the amount announced].”

RUSSIA

Although the Russian media had little to say on China’s military budget increase, the final text of a report outlining Russia’s economic development strategy until 2020, released earlier this month, identifies the growth of China’s economic potential and international status as a “main risk” for Russia. Fyodor Lukyanov, editor of the Russia in Global Affairs journal, expands on the implications of the Strategy 2020 report:  “Russia is clearly apprehensive about the rise of China. For the first time in recent history, Russia is weaker than its neighbor, and the gap will continue growing … how should Russia co-exist with China today and in the next five to 10 years if the current dynamics persist?”