The Chinese government has increased the country’s defence budget by 7.2% this fiscal. The budgetary allocation for this year now stands at $245 billion, an increase from $232 billion allocated last year. The Chinese Communist Party (CCP) has allocated only 1.6% of the GDP to the armed forces as China is said to be in an economic downturn. However, figures provided by the Chinese have often been considered far from the truth, in the past.
China’s defence budget is now thrice the size of India’s ($79 billion), while the American defence budget is approximately 3.5 times greater at $850 billion, which is 3.4% of the GDP. Other QUAD members Japan and Australia are also increasing their defence budgets, these nations spend $55.1 billion and $55.7 billion, respectively on defence. Japan and Australia have also planned to increase their defence budget in light of the Chinese threat.
Australia plans to spend as much as (Aus) $765 billion and Japan intends to increase its military spending to up to 2% of GDP by 2027, from the current 1.6% of GDP. Japan has traditionally capped its defence spending at 1% post the second world war. Meanwhile,
India’s current defence budget at $79 billion only accounts for 1.9% of the GDP. However, a sizeable chunk of India’s defence budget, 23.6%, is allocated for pensions.
The budget as a statement document has demonstrated the priority areas for Beijing. The Chinese intend to challenge the hegemony of the United States in the broader Indo-Pacific region. All branches of the PLA are on an extensive modernization and expansion drive.
With an aim of becoming the pre-eminent power in the Indo-Pacific, China is also investing in cutting edge technologies such as hyper-sonic weapons and sixth generation fighter aircraft. The Chinese Navy is also investing in newer and bigger platforms, which not only have a higher ticket price, but also have relatively high maintenance cost.
As per the available figures and facts China is closing the gap with the United States in certain areas. Chinese expenditure on its forces is often contested by analysts to be at about 50% of actuals. China is picking up momentum and intends to be a major contender for the US by the middle of the century. India needs to focus on developing its economy aggressively to close the gap with China. Finding the resources for it without neglecting other critical areas, is the challenge.
