Published: Tue, March 06, 2018
Markets | By Noel Gibbs

China Boosts Defense Spending Amid Military Modernization

China Boosts Defense Spending Amid Military Modernization

In a keynote address to an annual meeting of China's National People's Congress, Premier Li Keqiang said the country faced "profound changes in the national security environment", necessitating a stronger military.

Last year's growth target was "6.5 per cent or higher".

China's military planners have also taken note of the US shift this year in its threat analysis from terrorism to rivals Russian Federation and China, said Yue Gang, a retired colonel and military analyst. Reforms should focus on "international rules that have fallen behind the times and no longer align with the shared aspirations of all nations".

China has announced a military budget of 1.11 trillion yuan ($175bn; £126bn) for the coming year.

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"A large part of the growth of the defence budget is to make up for the low military spending in the past and is mainly used to upgrade equipment and improve the welfare of servicemen and women and the living and training conditions of grassroots troops", he said.

"China is committed to a path of peaceful development and China pursues a defense policy that is defensive in nature", he told a news conference. "China's development will not pose a threat to other countries", Zhang said.

"We will continue the reform of the national defense system and armed forces, as well as will further create powerful and cohesive border, sea and air defense", Li said at the first session of the 13th National People's Congress (NPC). In 2016, it grew by 7.6 percent.

Years of double-digit percentage growth have given China the world's second-largest defense budget after the United States, which is in a class of its own with a proposed budget of $716 billion for next year.

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Defense spending is still about a quarter of USA levels, but nevertheless its long-term growth, combined with a more assertive enforcement of China's territorial claims, has rattled some of China's neighbors.

"What's alarming is not the non-reporting of largely fictitious defense spending figures so much as the Chinese leadership is shedding even the pretense of being open about its military plans", Jennings said in an email to The Associated Press.

"These trends should be deeply concerning to the Asia-Pacific region and beyond", he said. Gen. Luo Yuan, vice president of the China Strategic Culture Promotion Association, said the budget was normal for maintaining the army, not a preparation for war.

Rivals such as the U.S., Japan and India should be less anxious at the moderate rate of budget growth, although they "won't feel happy" to see rapid enhancements in China's air, naval, missile and anti-satellite capabilities, said Ni, a professor at Shanghai University of Political Science and Law. "Considering such a situation, this symbolic increase is equal to no increase".

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