China announced an increased defence budget of 7.2%, 1.6 trillion yuan ($222 billion), from last year, aiming to strengthen its military expansion into its neighbourhood and a world-class military against its archrival, the United States. The China’s defence budget is just second highest to that of the US, which has proposed a defence budget of around $842 billion for 2024. While analysts are assessing the Chinese defence budget and its strategic implications due to tensions in the Chinese neighbourhood, one thing is clear – the country will expand its “war preparedness and improve its reserve forces.”
Military Modernisation vs GDP Growth
The People’s Liberation Army (PLA) will celebrate its centennial in three years and plans to become a world-class military power by 2049. According to experts, the rise in its military budget and modernisation are crucial to achieving its plan of a united China or the unification of Taiwan into the People’s Republic of China. However, China’s biggest challenge is the United States. Thus, it has been building its defence capability and raising its defence budget since the economic growth in the 2000s, but it later slowed down for various reasons. China targets a 5% GDP growth, although it did accept that it would be quite challenging considering its sluggish economic growth.
The Chinese defence budget has generally surpassed its national GDP targets. Experts believed that the post-COVID era would discourage China from investing in the PLA over its economic growth. But apparently, the Ukraine war and the changing geopolitical scenario have prompted China to continue its military spending to protect its interests.
Geopolitical Tensions
The US officially recognises the People’s Republic of China but maintains its unofficial alliance with Taiwan, which is why the increase in defence spending is a result of tensions at the Taiwan Strait. The ongoing China-US tensions were evident when the US Navy’s destroyer, USS John Finn, transited the Taiwan Strait when China announced its defence budget. China protested against it and claimed it was a provocation by the United States.
As a response, the United States 7th fleet officially stated that the “US ships transit between the South China Sea and the East China Sea via the Taiwan Strait and have done so for many years. The transit occurred through a corridor in the Taiwan Strait that is beyond any coastal state’s territorial seas. Within this corridor, all nations enjoy high-seas freedoms of navigation, overflight, and other internationally lawful uses of the sea related to these freedoms”.
India’s Challenge
India’s interim defence budget is Rs. 621,541 crores (US$78 billion) in 2024-2025. Considerably low in comparison to China’s defence budget of 7.2%, 1.6 trillion yuan ($222 billion) for the same fiscal year. In the last few years, Indian troops have faced skirmishes with Chinese troops at the border, leading to the most tense period between the two since the 1962 conflict. The Chinese defence budget has caused military challenges in the region, a matter of huge strategic importance for India, as Beijing’s defence budget is three times greater than New Delhi’s. What could be the Chinese reason behind the expansion of its defence investment at a time when the country is suffering its biggest economic slowdown since the COVID-19 pandemic? Another critical factor is that China’s GDP growth rate stood at 5.2% in 2023, while its defence budget stood at 7.2%. Thus, why would it spend more on its defence than investing in its domestic industries? Ask analysts in the region.
What has been noted in the past few years is that China has asserted its domination in the South China Sea against the Philippines and Taiwan over its territorial claims. Subsequently, it has also strained the US-China relationship. Like Japan, South Korea has been developing its own defence cooperation and building its defence capability in the last two years since the Ukraine war. China’s neighbours have been strengthening their national security infrastructure to face future uncertainty.
As India faces threats from the Chinese side, to counter them, the Modi government has been hiking up its defence allocation for capital acquisition and revenue expenditure, which stands at 27.67% of the total defence budget, according to the Ministry of Defence. The union government allocated Rs 6,500 crore to the Border Roads Organisation, a 30% hike from the 2023 budget, to strengthen border infrastructure, which is going on war footing to fortify the area along the Line of Actual Control with China borders.
Nitish Chavan
