China’s Defense Budget Set to Grow at Slower Pace
China has announced a defense budget for 2020 that will result in a year-on-year nominal increase of 6.6 percent, the lowest such figure since the first half of the 1990s.
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Chinese officials announced on May 22 a topline defense figure of 1.268 trillion yuan, which amounts to $178 billion.
The earmark for 2019 amounted to CNY1.19 trillion, or $173 billion. This represented an increase over the 2018 allocation of 7.5 percent in a year in which the country’s economy grew by 6.1-6.2 percent.
The reduction in overall increase for 2020 comes as China confronts sharply slowing economic growth, a viral pandemic (the novel coronavirus COVID-19) that began within its borders, and geopolitical pushback on Beijing.
The Chinese economy is expected to grow by around 1 percent this year. That would mark a significant slowdown for an economy that had already begun to show signs of reduced acceleration after years of tremendous growth. Factoring inflation into the equation knocks the figure down further, to about 4 percent growth in real terms.
Between 2016 and 2019, the defense budget increased between 7.1 and 8.2 percent, while GDP growth averaged roughly 6.6 percent. During this period, the defense earmark remained fixed at 1.3 percent of GDP, marking a parallel track between economic growth and military spending allocations.
China’s actual level of defense expenditure per annum is a matter of conjecture and confusion due to the purposefully opaque approach of the communist party.
Security experts routinely estimate China’s defense investment totals to be much higher than the topline figures publicly announced by Beijing.
Source : China Daily | Photocredit : Google