China hikes its defence budget 7% to $152 bn this year

07 March 2017

China has hiked its military budget by 7 per cent to $152 billion, about three times higher than India, as Beijing braces for countering America's increasing activity in the disputed South China Sea.

After skipping the customary mention of defence spending figures in the work report submitted by Chinese Premier Li Keqiang to lawmakers on Sunday, state-run Xinhua news agency on Monday announced that the military budget for this year stands at 1.04 trillion yuan ($152 billion).

China's defence budget for 2017 will grow seven per cent from the actual figure in 2016, Xinhua quoted an official with ministry of finance as saying on Monday.

"The country's military spending this year will stand at 1.04 trillion yuan, with 1.02 trillion yuan from the central budget," the Xinhua report said.

This is the first time that China's military spending will cross a trillion yuan.

Last year China's military spending was 954.35 billion yuan, a 7.6 per cent increase from 2015.

China's defence budget is about three times higher than India's $53.5 billion.

There was no explanation about why the amount of the annual defence spending was not mentioned in Li's annual work report to the National People's Congress (NPC) on Sunday.

On 4 March, NPC spokesperson Fu Ying said China's defence budget will be increased by seven per cent accounting for 1.3 per cent of the country's GDP, compared with NATO members' pledge to dedicate at least two per cent of GDP to defence.

"You should ask them what their intentions are," Fu told reporters, adding that China has "never inflicted harm on other countries".

Chinese officials defended the seven per cent hike this year, saying it is still smaller than the 10 per cent increase proposed by President Donald Trump to America's defence budget to take it to about $654 billion, the highest in the world.

Much of China's budget this year is expected to go for the development of its navy as Beijing looks to expand its influence beyond its shores.

China currently has one aircraft carrier and is building another with a third in the planning stage to match the growing strength of the US navy in hot spots like the South China Sea.

China-US military tensions are on the rise since former American President Barack Obama adopted the 'US pivot to Asia' policy, committing large number of US military forces to be deployed in the Asia Pacific to counter China's growing military might.

After his election, Trump has sent an aircraft carrier to the South China Sea to assert the freedom of navigation in the area claimed by China.

Vietnam, the Philippines, Malaysia, Brunei and Taiwan have counter-claims over the South China Sea.

Yin Zhuo, a rear admiral and a senior researcher at the PLA Navy Equipment Research Centre told China Central Television that in order to protect China's sovereignty and national interests, the PLA navy at least needs five to six aircraft-carriers to maintain presence in specific regions.

An anonymous PLA air force officer told the Global Times, "Due to 'the US pivot to Asia' strategy since the Obama era, the possibility of military conflict is increasing in the Asia-Pacific region, including the Korean Peninsula, Taiwan Straits, and East and South China seas, so there is no reason for us not to increase the defence budget."


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