China Defense Budget rise to Defy Slowing Economy

China’s defense budget this year will rise about 10 percent compared with 2014, a top government official said on Wednesday, outpacing the slowing economy as the country ramps up investment in high-tech equipment such as submarines and stealth jets.

Parliament spokeswoman Fu Ying told a news conference that the actual figure would be released on Thursday, when the annual session of the largely rubber-stamp National People’s Congress opens. Last year, defense spending rose 12.2 percent to $130 billion, second only to the United States.

China has logged a nearly unbroken two-decade run of double-digit budget increases, though many experts think the country’s real defense outlays are much larger.

The military build-up has jangled nerves around the region, particularly as China has taken an increasingly robust line on its territorial disputes in the East and South China Seas.

“Compared with great powers, the road of China’s defense modernization is more difficult. We have to rely on ourselves for most of our military equipment and research and development,” Fu said.

“In addition, we must strengthen the protection of our officers and soldiers. But fundamentally speaking, China’s defense policy is defensive in nature. This is clearly defined in the constitution. We will not easily change this direction and principle.”

While Beijing keeps the details of its military spending secret, experts have said additional funding would likely go towards beefing up the navy with anti-submarine ships and developing more aircraft carriers beyond the sole vessel in operation.

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“Carriers have definitely got to be on the list,” said John Blaxland, Senior Fellow at the Strategic and Defence Studies Centre at the Australian National University in Canberra.

“But also we’ve seen a massive surge in the number of submarines, and of course everybody loves submarines. The intimidatory effect of a submarine is hard to be beat.”

Money would also likely go into cyber capabilities and satellites, Blaxland added.

China’s leaders have routinely sought to justify the country’s military modernization by linking defense spending to rapid GDP growth. But growth of 7.4 percent last year was the slowest in 24 years, and a further slowdown to around 7 percent is expected in 2015.

“We have achieved so much success with reform and opening up, we have not relied on gunboats to develop roads, but instead we have relied on complete and mutual beneficial cooperation,” Fu said.

“We have been successful on this road, the road of peaceful development. We will adhere to the path of peaceful development.”

The U.S. military and diplomatic “rebalancing” towards Asia and President Xi Jinping’s crackdown on corruption in the People’s Liberation Army, which has caused some disquiet in the ranks, are among the other factors that have kept military spending high, experts have said.

Beijing also says it faces a threat from Islamist militants in the far western region of Xinjiang, and is drafting a new anti-terror law that will create a legal framework for sending troops abroad on counter-terrorism missions.

Source: Reuters