China’s defence budget reflects grand goals

The National People’s Congress (NPC) has hiked the defence budget for 2019-20 by 7.5 percent to US$ 177.49 billion (Yuan 1.19 trillion). After five consecutive double-digit hikes in the allotment for defence up to FY 2015-16, the relatively modest hike in the last four years is an acknowledgement of steadily declining economic growth rates.

Coming close on the heels of wide ranging reforms in the organisational structure of the People’s Liberation Army (PLA), the defence budget is a clear signal from the regime led by President and Commander-in-Chief Xi Jinping that China will continue its relentless march towards becoming the pre-eminent military power in Asia. It also indicates an enduring commitment to the strategy of military assertiveness in dealing with territorial disputes.

While presenting the budget to the NPC – China’s rubber stamp Parliament, Premier Li Keqiang told the members, “We will implement the military strategy for the new era, strengthen military training under combat conditions, and firmly protect China’s sovereignty, security and development interests. We will further implement the military-civilian integration strategy, and speed up efforts to make innovations in defence-related science and technology.”

The Central Military Commission’s marked emphasis on making China a maritime power has set alarm bells ringing in Asian capitals. On an earlier occasion Li had said, "China is a major maritime country. We need to draw up and implement a strategic maritime plan, develop marine economy, protect the marine environment, resolutely safeguard China's maritime rights and interests, properly handle maritime disputes, actively expand bilateral and multilateral maritime cooperation and move close to achieve the goal of building China into a maritime power.”

Commenting on the proposed defence budget, the People’s Liberation Army Daily reported that the armed forces would “focus on supporting national defence and military reform and comprehensively promoting national defence and military modernisation.”

China’s neighbours and governments across the world have not forgotten the spectacular anti-satellite (ASAT) test successfully conducted by China in January 2007. They see pictures of the Liaoning aircraft carrier and are aware of plans to acquire more aircraft carriers and submarines. The acquisition of SU-30 long-range fighter-bombers with air-to-air refuelling capability, the development of anti-ship ballistic missiles and sophisticated cyber operations capability  have also not gone unnoticed.

China’s growing footprint in the South China and East China Seas, military construction and reclamation activities on some of the disputed Spratly islands in violation of international norms have raised the spectre of possible conflict as a mechanism for the resolution of disputes. This sort of military assertiveness borders on aggression and has caused tensions to rise in the region.

China does not provide a detailed breakdown of its actual military expenditure which is actually far higher than the officially published figure. This year it is expected to cross Yuan 1.25 trillion. Complete transparency in defence spending has seldom been a strong point even among countries that take pride in being liberal democracies. Totalitarian regimes like the one in China do not practice egalitarian accounting practices, neither do they have a real grip on all the details of what they actually spend.

David Shambaugh a well-known China analyst, has listed several items of expenditure that do not figure in China’s defence budget: “China’s official defence budget does not appear to include all funds for (1) Chinese-made weapons and equipment production (as distinct from procurement); (2) some RDT&E (research development test and evaluation) costs; (3) the paramilitary People’s Armed Police; (4) funds for weapons purchases from abroad; (5) funds directly allocated to military factories under the control of the GAD (General Armaments Department); and, (6) military aid.”

China’s military aims and modernisation strategy have been enunciated in its White Papers on National Defence: “... a three-step development strategy in modernising China’s national defence and armed forces, in accordance with the state's overall plan to realise modernisation. The first step is to lay a solid foundation… the second is to make major progress around 2020, and the third is to basically reach the strategic goal of building informationised armed forces and being capable of winning informationised wars by the mid-21st century.”

In recent military training exercises and wargames, the PLA has been practising rapid deployment of its airborne forces in Tibet and elsewhere and amphibious landing operations to simulate landings on one or more of the disputed islands. The trend-lines in the procurement of military hardware and training activities are indicative of future plans for strategic outreach.


With the improved logistics infrastructure in Tibet, including the Gormo-Lhasa all-weather railway line, newly constructed road axes with good lateral roads linking them and many new air strips, the Chinese are now capable of inducting larger numbers of troops into Tibet in a shorter time frame and sustaining them for longer durations. India needs to invest more in improving the logistics infrastructure along the border with Tibet, in hi-tech intelligence, surveillance and reconnaissance (ISR) systems for early warning and in generating land- and air-based firepower asymmetries to counter China’s numerical superiority.


At Rs. 3,18,931.22 crore (excluding pensions) India’s budget for FY 2019-20 (US$ 45.46 billion), is almost one-fourth of China’s declared defence budget of US$ 177.49 billion. Due to China’s vigorous military modernisation drive, the military gap between India and China is growing every year.


The Indian army and the air force are in the process of developing offensive operational capabilities to carry the fight onto Chinese territory if it ever becomes necessary. Developing such capabilities requires a substantial increase in capital expenditure. The present defence budget – less than 1.5 per cent of the GDP – is too low to undertake the capacity building that is necessary to deter China from contemplating another border war. India’s growing economy should be able to sustain a 0.5 to 1.0 per cent hike in the defence budget over a period of three to five years, especially if the government simultaneously shows the courage to reduce wasteful subsidies.


The writer is former Director, Centre for Land Warfare Studies (CLAWS), New Delhi.