China and Russia added the most to their defence spending in 2013

2014 will be the first year that global defence budgets will grow overall since 2009, according to the IHS Jane’s Annual Defence Budgets Review from IHS Inc the leading global source of information and analytics. Total global defence spending in 2014 will be USD1.547 trillion up from USD 1.538 trillion in 2013 – 0.6% increase in real terms.

By 2015, China will spend more than the UK, France and Germany combined. In 2015, China is expected to spend USD159.6 billion, while the sum of the three largest Western European markets is expected to reach just USD149.0 billion. Defence budgets in the five largest Western European markets (UK, France, Germany, Italy and Spain) decreased by 1.3 per cent in 2013. Regional spending totalled USD242.8 billion in 2013 and this is expected to decrease to USD237 billion by 2018 in real terms.”

IHS projections suggest that official Chinese defence spending for 2014 is likely to be in the region of USD130 billion, around 10 times the size of Taiwan’s budget. Taking adjustments for pensions and military R and D into account, Beijing’s military expenditure is now thought to account for around 9 percent of the global total.

The IHS defence budgets are not adjusted for lower wages in China or other purchasing power parity factors. They also do not include spending on actual military operations (like the US Afghanistan war) In 2012 based on purchasing power parity, China is expected to have a defence budget of $238 billion in 2015. This would be about half of the US defence budget

Top Twenty Ranking
Defence Budget   Ranking 2013
Rank   Country   $(millions)

1 USA            582,424
2 China          139,203
3 Russia          68,887
4 UK              58,854
5 Japan           56,842
6 France          53,091
7 India           46,183
8 Germany         44,688
9 Saudi Arabia    42,858
10 Korea,South    31,561
11 Brazil         29,516
12 Australia      29,444
13 Italy          27,790
14 Turkey         20,618
15 Canada         19,636
16 Taiwan         14,834
17 Spain          13,199
18 Colombia       13,190
19 Israel         13,097
20 Algeria        10,778

Source: IHS Jane’s Aerospace, Defence and Security

Russian defence spending is set to increase over 44 percent in real terms over the next three years. Under the Duma’s adopted plan, Russian defence spending will rise from about USD68 billion in 2013 to just over USD98 billion in 2016. This plan propelled Russia to the third largest defence spender in the world. The rapid increase in spending means that the defence budget will increase to 15.7 percent of federal expenditure in 2013 to and to 20.6 percent by 2016. These additional funds will likely be spent on modernising equipment, and improving training and social conditions for military personnel.

China is not expected to match or exceed the US defence budget until 2025-2050. Even when it does match the annual defence budget it will take many years to develop comparable military capability. The UK will have one third of China’s budget this year but the UK has superior force projection and military capabilities.