The surge in China’s military spending is sending a chill down the spines of many nations. With an 18% increase over 2007, the $59 billion (Rs2.4 trillion) to be spent in 2008-09 can buy a big box of dangerous toys. The country’s neighbours, including India, have reason to be concerned.
What adds to the problem is the opaque nature of China’s military budget: Not only is the spending under-reported, but major items of expenditure are also not accounted for. In its annual report to Congress, Military Power of the People’s Republic of China, 2008, the US department of defence said that country’s published budget does not include expenditure on strategic forces, foreign acquisitions, military- related research and development and paramilitary forces.
The extent of spending beyond the reported figure can vary anywhere from two to three times. For 2007, the official spending figure was $46 billion. Total military spending, as estimated by the Pentagon, ranged anywhere from $97 to $139 billion. This is a worrisome situation.
Why? Because this makes it very difficult for military planners elsewhere to discern what China is up to. Consider Chinese and Indian spending in comparative terms. Data from the Stockholm International Peace Research Institute shows that from 2001 to 2005, India on average spent 2.8% of GDP on defence expenditure. For China, the figure ranged from 2% to 2.2% over the same time. On the surface, India spent more than China on this count.
But this can be misleading in light of the lack of transparency in Chinese spending figures.
Moreover, in absolute terms, Chinese spending is still greater than India’s: In 2008-09, the Indian budget for defence services stands at $26.4 billion, 2.23 times less than China’s. Of the $26.4 billion, only $12 billion will be on capital spending. The corresponding figure for China is not known, but one does not need to guess hard that it will be much more. In the end, China can buy more hardware and spend more on military research and development.
This development needs careful assessment. It’s time India reappraised its defence spending—focusing more on capital expenditure than staff costs.
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