China Plans 7.1 Percent Defense Spending Rise This Year, Outpacing GDP Target

By Reuters
March 6, 2022 Updated: March 6, 2022

BEIJING—China will spend 7.1 percent more on defense this year, outpacing last year’s hike and the Chinese regime’s modest economic growth forecast.

Premier Li Keqiang pledged to enhance military training and combat readiness for the Chinese army, which is developing an array of weapons from stealth fighters to aircraft carriers.

The spending figure, set at 1.45 trillion yuan ($229.47 billion) in the national budget released on Saturday, is closely watched by China’s neighbors and in Washington as a barometer of how aggressively the Chinese regime will beef up its military.

This year’s 7.1 percent hike marks the seventh consecutive single-digit increase, but is the fastest pace since the 7.5 percent proposed for 2019.

It also comes in above targeted slower economic growth of around 5.5 percent amid domestic headwinds for the world’s second largest economy, including a downturn in the country’s vast real estate sector and lackluster consumption.

The Chinese communist regime is nervous about challenges on several fronts, ranging from Taiwan to U.S. naval and air missions in the disputed South China Sea near Chinese-occupied islands and a festering border dispute with India.

Li, in his state-of-the-nation address to the largely rubber-stamp legislature, said this year the regime would move faster to modernize the military’s logistics and asset management systems, and build a modern weaponry and equipment management system.

The budget gives only a raw figure for military expenditure, with no breakdown. Many diplomats and foreign experts believe Beijing under-reports the real number.

China’s reported defense budget in 2022 is less than a third of proposed U.S. spending.

Arms Race?

Takashi Kawakami, a professor at Japan’s Takushoku University, said the spending increase was “significant.”

“We will see how the U.S. responds to the increase in the defense budget, and how much China will increase its defense budget next year, but it looks like it will result in an arms race.”

President Joe Biden is expected to ask Congress for a U.S. defense budget exceeding $770 billion for the next fiscal year as the Pentagon seeks to modernize the military, sources told Reuters last month.

The Chinese regime has long argued that it needs to close the gap with the United States. China, for example, has two aircraft carriers, compared with 11 in active service for the United States.

Kuo Yu-jen, a security expert at Taiwan’s National Sun Yat-sen University’s Institute of China and Asia-Pacific Studies, said Beijing was being forced to spend more on research and development in light of the China–U.S. technology war.

“Costs for China’s third and fourth aircraft carriers are going up, too,” he added.

($1 = 6.3188 Chinese yuan renminbi)