March 04, 2011

China increases defence budget to 91.5 billion

China plans to increase defense spending 12.7 percent this year China will spend 601.1 billion yuan ($91.5 billion) on defense. The Pentagon is requesting $671 billion for fiscal 2012, starting Oct. 1, $37 billion less than this year’s request. U.S. analysts say China’s actual defense spending is much higher, because the announced figures may not include international arms purchases and other expenses.

The official defense budget omits a lot of defense- related expenditures, including acquisition of foreign weapons, much defense-related R&D, pensions, and support provided to the military by local authorities,” said Phillip C. Saunders, a research fellow at the National Defense University’s Institute for National Strategic Studies in Washington. “As a result, it significantly understates actual defense spending.”

Defense spending accounts for less than 2 percent of China’s gross domestic product, compared with almost 5 percent in the U.S. China’s defense spending increased an average of 16.2 percent a year from 1999 to 2008, according to figures from a defense white paper published in 2009. The biggest increase was 20.4 percent in 2006.

I had previously tried to project the future defence budgets for China and the United States from 2009-2040

Estimate of Defence Budgets for China and the USA in Billions

Official Defence Budget Forecast Based on Fixed Percent of GDP

GDP Forecasts in Trillions of US Dollars

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