China’s defence budget to go up by 7.6 percent

By Gaurav Sharma

Beijing, March 5 (IANS) China on Saturday said its defence spending will rise by 7.6 percent in 2016 -- the lowest in six years, as it struggles to tide over an economic downturn.

The hike against last year's 10.1 percent increase works out to be 954.354 billion yuan (about $146 billion) which is far lower than the US military expenditure of $598.5 billion in 2015.

The fresh raise will make China the second-largest defence spender.

The budget was presented in the annual session of the National People Congress (NPC) - China's parliament - which began here on Saturday. The session, which will discuss the 13th five-year- plan, ends on March 16.

China's military expenditure had seen a five-year run of double-digit increases between 2011 and 2015. The country saw the defence budget growing by 7.5 percent in 2010.

China's economic growth plummeted to 6.9 percent, slowest in 25 years in 2015. Market crash and devaluation of yuan added to the trouble. Some experts attribute the tightening of military budget to economic downturn.

Addressing around 3,000 NPC members at the Great Hall, Chinese Premier Li Keqiang admitted that the nation was going through a tough time.

However, he pegged this year's economic growth between 6.5 and 7 percent.

"China will face more and tougher problems and challenges in its development this year, so me must be fully prepared to fight a difficult battle," Li said.

General Chen Zhou, a military expert, linked the forecast-beating slowdown with China's "economic and social status quo" in an interview with Xinhua.

"A single-digit rise following years of double-digit growth is a prudent, moderate move," said Chen, adding that there are no "hidden" expenses in the country's military spending.

The cut of 300,000 service people announced by Chinese President Xi Jinping in September 2015 might also have helped drive down the defence budget growth figure.

China will make its military more revolutionary, modern and better structured, strengthen in a coordinated way military preparedness on all fronts and for all scenarios and work meticulously to ensure combat readiness and border, coastal and air defence control, Premier Li Keqiang said in the government work report to the national legislature annual session.

Logistics and equipment development will be stepped up and the military's size and structure will undergo reforms, he said.

To modernise management and administration, the People's Liberation Army (PLA) inaugurated a General Command for the army, the PLA Rocket Force and the PLA Strategic Support Force in December. In February, it replaced seven military area commands with five PLA theatre commands.

"The PLA is in the key phase of deepening reforms," Major General Luo Yuan said.

"A moderate increase in the military budget is necessary," he said.

Though recent rises in defence budgets surpassed GDP growth, China's military expenditure in 2015 accounted for 1.33 percent of GDP, well below the world's average of 2.6 percent.

The per capita military spending is even less, representing only about 5.6 percent that of the US, 11 percent that of Britain and 25 percent that of Japan.

(Gaurav Sharma is the Beijing-based correspondent of IANS. He can be contacted at gaurav.s@ians.in)