China’s defense budget stays moderate and restrained: NPC spokesperson
Published: May 22, 2020 12:42 AM

A main battle tank (MBT) attached to an armored detachment of a combined brigade under the PLA 72nd Group Army rumbles through a narrow rough mountain road during a driving skills test on May 11, 2020.Photo:China Military

China pursues defensive policies and the defense budget is moderate and restrained in regards to the total amount of the budget, per capita spending and the rate of GDP, Zhang Yesui, spokesperson for the 13th National People's Congress (NPC) told a press conference on Thursday. 

Zhang made the remarks in response to a Japanese reporter’s question on whether China’s defense budget will decrease considering the influence stemming from the COVID-19 epidemic.

Zhang said that China’s defense budget has stayed at around 1.3 percent of its GDP, which is far below the average global level of 2.6 percent. Compared to the country with the most military spending, China’s defense budget in 2019 only accounted for one quarter of that.
Since 2016, the increasing rate of China’s defense budget has kept decreasing to single digits and the growing rate has stayed at around 7 percent to 8 percent. From 2016 to 2019, the growth rate of the defense budget was 7.6 percent, 7 percent, 8.1 percent and 7.5 percent respectively. Experts reached by the Global Times said that this year’s defense budget will keep rising at a slow rate.

According to a white paper released by the Information Office of the State Council in July 2019, China makes the scale and structure of its defense budget in accordance with a developing country’s development level and defense needs, and manages and uses the money in accordance with laws. "The defense expenditure/GDP ratio has been keeping steady, growing synchronized and coordinated with national finance expenses."

An observer, who requested anonymity, told the Global Times that the COVID-19 epidemic definitely has had influence on the economy and the index for economic and social development will be adjusted. Under such circumstances, it’s impossible the defense budget will experience an obvious increase.  
Liu Zhengshan, an expert from an urban development research center, told the Global Times on Thursday that the increase rate of this year’s defense budget will maintain a decreasing trend. “The year of 2020 is the year to work on poverty alleviation and the building of an overall well-off society. The country’s main focus for national development would be directed to people’s livelihoods.”

Considering the impact of the epidemic, China would pay more attention to issues regarding people’s livelihoods. It fits the trend to decrease the defense budget growth rate, according to Liu.

The anonymous observer said that there will be no sharp decrease in this year’s defense budget. A slight increase or decrease would be seen as maintaining last year’s level. “Currently, China has been faced with many security threats and challenges. Pro-independence forces in Taiwan keep making separatist remarks and moves; some foreign politicians have lost rationality, which makes it hard to predict future policies. All these need China to have enough defensive strength to safeguard national sovereignty, integrity and security.”

According to an analytical report on the defense budget by Essence Securities on Wednesday, the defense budget growth rate for 2020 will be at 6.8 to 7 percent. 

"Under a background in which tension in the region has become a new normal, the development of military equipment is expected to accelerate, and the expenditure on weaponry and equipment could maintain a share of more than 40 percent," the report reads. China's defense expenditure is categorized by application, namely personnel expenses, training maintenance fees and equipment spending.

Song Zhongping, a military expert, said on Thursday that since China’s military spending is far less than it actually needs, the international standards and the national strategic needs, a moderate increase of the defense budget fits the needs of economic development.

He thought that by going with the rate of economic development, the increase rate of the defense budget in 2020 may be around 5 percent. 

Liu said that compared with government investment expenses in some industrial fields, national defense funding has a relatively lower pull effect on economic growth. According to international experience or economic theories, military expenditure should not make up too much of a share, or a crowding-out effect could take place and result in negative impacts on economic growth. 

"But compared to developed countries like the US, China's defense expenditure/GDP ratio is not high enough, and defense expenditure will yield positive impact to economic growth," Liu said.