Li Zhaoxing, spokesman for the Fifth Session of the 11th National People's Congress, at a news conference in Beijing on Sunday. Feng Yongbin / China Daily

Budget smaller than other major countries: NPC spokesman

BEIJING - Military spending will see lower growth this year despite new security concerns such as defending citizens and property overseas.

The draft defense budget is 670 billion yuan ($106.4 billion), up 11.2 percent year-on-year, Li Zhaoxing, spokesman for the annual session of the national legislature, said on Sunday at a news conference.

The growth rate, which Li said is "reasonable and appropriate", is down from last year's 12.7 percent.

Training, maintenance, equipment and salaries account for the largest bulk of military spending, Li said.

Costs for research, procurement, repair, transport and storage of weapons and equipment, are also included in the budget, he said.

In response to concerns of some Western observers that the rising defense budget may pose a threat to world peace, Li made it clear that China follows a national defense policy that is defensive in nature.

Compared to other major countries, military spending is low given the population of 1.3 billion, the vast land area and coast, Li said.

Su Hao, a professor and director of the Center for Strategic and Conflict Management at the Beijing-based China Foreign Affairs University, said potential security issues China could face are an important reason for the country to maintain its military budget.

"There're new issues (that need funding), like the protection of citizens and investment overseas," Su said.

Yin Zhuo, a military expert and retired navy rear admiral, said the budget increase is "moderate" considering the relatively low military budget China maintained in the 1980s and 1990s.

Bonnie Glaser, senior fellow at the Center for Strategic and International Studies, said the most important reason for the increase is China's continued economic growth.

"To my mind, the more important figure is the percentage of China's overall budget expenditures allocated to the military," she told China Daily.

A leading European defense analyst said that the budget increase was not that high, considering the factors.

"I don't think the budget increase is as substantial as some in the West were expecting," Gary Li, head of intelligence at Exclusive Analysis, a London-based political risk consultancy, said.

"Every year we have this repeat of alarm and speculation as to the intentions of Chinese military spending, while the most important question should be where this money is going. Over the past decade, Chinese defense spending has indeed gone up, but the cost of the new advanced weapons platforms have also gone up dramatically. The PLA is essentially getting fewer but better kit for their money, especially in the field of modern naval vessels and aircraft," he said.

"Considering that even the most advanced equipment of the PLA is at least one generation behind that of the US, future research and development will also require considerable sources of funding."

Xu Wei and Tan Yingzi contributed to this story.

China Daily

(China Daily 03/05/2012 page1)