China defense budget grows 7.2% despite other ‘belt-tightening’

BEIJING — China’s annual defense spending is set to grow by 7.2% this year, well above the country’s economic growth target of “around 5%,” amid high tensions with the U.S. and festering disputes over Taiwan and the East and South China Seas.

The Ministry of Finance submitted its annual budget plan to the National People’s Congress on Tuesday, the same day Premier Li Qiang delivered his government work report and reiterated Beijing’s firm stance on matters such as Taiwan and Hong Kong security. The defense increase will bring the budget for 2024 to nearly 1.67 trillion yuan ($232 billion).

The pace of military expansion matches the spending budgeted under former Premier Li Keqiang’s watch last year. This marks the third year in a row of defense outlays growing more than 7%, even as the economy continues to slow down.

In the draft budget, the Finance Ministry referred to the defense increase as one of the “key areas” with “obligatory commitments,” along with technological advancement, rural revitalization and environmental protection.

The ministry stressed that the continued increase is in line with “fully implementing Xi Jinping’s thinking on strengthening the military.” The draft document emphasized that the ministry “will provide stronger financial guarantees for efforts to modernize our national defense and the armed forces on all fronts, and consolidate and enhance integrated national strategies and strategic capabilities.”

Defense spending is a core part of the Chinese national budget, taking up about 40% of the expected overall central government expenditure of 4.152 trillion yuan. The money earmarked for the military is about 10 times as much as the education budget, and almost five times more than the amount budgeted for for science and technology.

The Finance Ministry stated that defense spending is a “priority,” while it continues to cut other general expenditures and act “in strict compliance with belt-tightening requirements.”

China’s aircraft carrier Liaoning takes part in a drill in the western Pacific Ocean in 2018.   © Reuters

China trails only the U.S. in military spending and has been beefing up its armed forces as tensions rise with Washington and its allies. President Xi Jinping has emphasized the significance of preparing for the 100th anniversary of the establishment of the People’s Liberation Army in 2027.

Last September, U.S. Senator Dan Sullivan, a member of the Senate Armed Services Committee, revealed that China’s “real” military budget was closer to around $700 billion, citing a briefing from intelligence officials. The figure, if accurate, would be over three times what was in China’s official military spending plan.

The details of the latest defense budget expansion were not available, but the focus is understood to be on catching up with the U.S. while filling the gap in nuclear capabilities by enhancing other conventional weaponry.

NPC spokesperson Lou Qinjian had stressed at a news conference on Monday that the defense budget expansion in China would be “reasonable,” in the context of gross domestic product and the overall national budget.

Premier Li, in his speech on Tuesday, vowed an across-the-board effort to enhance the military’s capabilities. “We in governments at all levels will provide strong support to the development of national defense,” he said.

In the same context of security, Li expounded on Beijing’s latest position on Hong Kong.

The premier emphasized that Beijing maintains its commitment to “fully, faithfully, and resolutely implement” the framework of “one country, two systems,” with the people of Hong Kong administering the city with a high degree of autonomy. Yet, the framework has been diluted, especially since Beijing imposed a national security law in June 2020, and Li also stressed the “principle” that Hong Kong must be run by “patriots.”

This “principle” was not part of the joint declaration with the U.K. signed in 1984, which paved the way for the handover to China and is registered in the United Nations. Hence, it is not prescribed in the Basic Law, the city’s constitution. Nevertheless, it was abruptly brought up by Beijing a decade ago and has changed the nature of local elections.

Li made no mention of the ongoing push in Hong Kong to introduce the city’s own, more comprehensive national security law, known as Article 23.

Meanwhile, Li’s report indicated the central government’s “support” for the Guangdong-Hong Kong-Macao Greater Bay Area, as a key project for regional development, along with development projects in the Beijing-Tianjin-Hebei region and the Yangtze River Delta.

The Greater Bay Area project has been around for years without meaningful advances, and was not mentioned in the same context by Li’s predecessor, Li Keqiang, in his final speech to the NPC last year. But Li Qiang said the project will ensure that Hong Kong and Macao “better integrate themselves into China’s overall development and maintain long-term prosperity and stability.”

On Taiwan, Li basically inherited lines from his predecessor, touching on adherence to the controversial “1992 Consensus” — a supposed tacit understanding between Taiwan’s former Kuomintang government and the Chinese Communist Party that both sides of the Taiwan Strait acknowledge there is “one China,” with each side having its own interpretation of what “China” means. This is not accepted by Taiwan’s current Democratic Progressive Party administration, led by incumbent President Tsai Ing-wen and the vice president who will soon succeed her, Lai Ching-te.

With some slight tweaks to past wording, Li vowed “to be firm in advancing the cause of China’s reunification.” He added that China stands firmly opposed to “external interference” in Taiwan, not mentioned last year.

Near the end of his speech, when Li connected the Taiwan issue to “the glorious cause of national rejuvenation,” a large round of applause broke out in the Great Hall of the People.

source : nikkei asia