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China boosts defence spending by 7.2 per cent: How does it compare to India's military expenditure?

As tensions with Taiwan escalate, China has dropped the mention of "peaceful reunification" in a government work report. The defence budget is closely watched by China's neighbours and the United States, who are concerned about Beijing's strategic intentions.

Edited By: Aveek Banerjee @AveekABanerjee Beijing Published on: March 05, 2024 15:04 IST
China, defence budget, India
Image Source : REUTERS China's defence expenditure is the second-highest in the world.

Beijing: China has decided to boost its defence spending by 7.2 per cent this year, which is already the world's second-highest behind the United States at 1.6 trillion yuan ($222 billion), amid tensions with the US, Taiwan, Japan and neighbours who share claims to the disputed South China Sea. China also officially adopted tougher language against Taiwan as it released the budget figures, dropping the mention of "peaceful reunification" in a government work report.

The move was announced during the opening of the National People's Congress on Tuesday, mirroring the rate presented in last year's budget and again comes in above the government's economic growth forecast for this year. Tensions have risen sharply in recent years over Taiwan, the democratically ruled island that China claims as its own, and elsewhere across East Asia as regional military deployments rise.

"China is showing that in the coming decade, it wants to grow its military to the point where it is prepared to win a war if it has no choice but to fight one," said Li Mingjiang, a defence scholar at the Rajaratnam School of International Studies (RSIS) in Singapore. The defence budget is closely watched by China's neighbours and the United States, who are wary of Beijing's strategic intentions and the development of its armed forces.

China is looking to purchase new equipment, which will take up the largest single chunk of the budget as the military works to meet Chinese President Xi Jinping's goal of full modernisation by 2035, according to International Institute for Strategic Studies (IISS). That push continues across several fronts, with China producing weapons ranging from warships and submarines to drones and highly advanced missiles that can be equipped with both nuclear and conventional warheads.

China's continuous military spending increases without sufficient transparency were "the greatest strategic challenge ever to ensure the peace and stability of Japan and the international community and strengthen international order", said Japanese government spokesperson Yoshimasa Hayashi in Tokyo. 

How does it compare to India?

In the interim Union Budget announced by Finance Minister Nirmala Sitharaman last month, the Defence Ministry got the lion's share of the budgetary allocations at Rs 6.1 lakh crore for the year 2024-25. China's military expenditure stood at 1.67 billion yuan (Rs 19.26 lakh crore). This means China's defence budget is more than three times larger than India's.

India-China relations have been frozen since May 2020 after the Galwan border clash near the Line of Actual Control (LAC). India is pressing the People's Liberation Army (PLA) of China to disengage from the Depsand and Demchok areas. While India has maintained that there cannot be restoration of normalcy in its relations with China as long as the state of the borders remains abnormal, China continues to press India to delink the border issue and bilateral relations and work for normalcy.

The two militaries held 20 rounds of Corps Commanders level meetings and agreed to disengage from four points mainly the Galwan Valley, the Pangong Lake, Hot Springs and Jianan Daban (Gogra) contributing to the de-escalating tension along the border, according to Wu. However, the meetings have so fear yielded no breakthrough.

The Galwan Valley clashes on June 15, 2020, significantly strained the bilateral ties. The Western Theater Command’s deployments along the LAC will likely continue through 2023, it said. The report said that negotiations between India and China "made minimal progress as both sides resisted losing perceived advantages on the border". India has maintained that its ties with China cannot be normal unless there is peace in the border areas.

China's tensions with other neighbouring countries

China claims ownership over virtually the entire strategic waterway despite international rulings that invalidated Beijing's vast territorial claims, such as that in 2016 by the Permanent Court of Arbitration, an international body based in The Hague. China rejected that ruling. China's aggression in the South China Sea has put it in conflict with many Asian countries.

In recent times, China has been locked into heated confrontations with the US-backed Philippines, which has stepped up efforts to assert its claims in the disputed waters against the wishes of the Chinese coast guard ships. Beijing and Manila have been playing cat-and-mouse around the uninhabited Second Thomas Shoal in the Philippines' exclusive economic zone when the Philippines deployed resupply missions for Filipino soldiers living aboard an ageing warship deliberately run aground in 1999 to protect Manila's maritime claims.

In the latest flareup of tensions, Chinese and Philippine coast guard vessels collided in the disputed South China Sea, and four Filipino crew members were injured on Tuesday. The Chinese coast guard ships and accompanying vessels blocked the Philippine coast guard and supply vessels off the disputed Second Thomas Shoal and executed dangerous manoeuvres that caused two minor collisions between the Chinese ships and two of the Philippine vessels, Philippine officials said.

China sets up ambitious growth target

Meanwhile, Chinese Premier Li Qiang announced an ambitious 2024 economic growth target of around 5 per cent on Tuesday, promising steps to transform the country's development model and defuse risks fuelled by bankrupt property developers and indebted cities. In setting a growth target similar to last year, which will be harder to reach as a post-COVID recovery is losing steam, Beijing signals it is prioritising growth over any reforms even as Li pledged bold new policies, analysts said.

China started the year with a stock market rout and deflation at levels unseen since the global financial crisis of 2008-09. The property crisis and local government debt woes persisted, increasing pressure on China's leaders to come up with new economic policies. With awe at China's economic miracle fading rapidly, some economists have drawn comparisons with Japan's lost decades since the 1990s, calling for pro-market reforms and measures to boost consumer incomes.

Faced with a demographic crisis that also threatens the switch to a consumer-led growth model, China's state planner vowed to improve policies supporting childbirth, while raising benefits and basic pensions for its growing elderly population. China also plans to run a budget deficit of 3 per cent of economic output, down from a revised 3.8 per cent last year.

(with inputs from agencies)

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