China’s defence spending races to match U.S.
By Paul Koring
The Globe and Mail
International News: Military, Page A17
Published: 12 June 2007

China’s military spending soared last year, vaulting Beijing into second place by some measures in the global arms bazaar, but still lagged far behind the United States.

U.S. military spending, fuelled by war in Iraq and Afghanistan, reached $529-billion (U.S.) last year, or nearly half of all the world’s total defence spending, according to the Stockholm International Peace Research Institute.

“The large increase in the USA’s military spending is to a great extent due to the costly military operations in Afghanistan and Iraq,” it said. The Pentagon burned through $1.4-billion every day last year, or $1,756 for each American over the course of a year.

By comparison, Canada is ranked 13th in the world in overall military spending, at $13.5-billion a year, or $414 a person.

While total U.S. defence spending dwarfs the rest of the world, it remains a relatively small part - roughly 4 per cent - of the total U.S. economy. That’s more than double the Canadian defence spending level but less than half the proportion spent in some countries such as Saudi Arabia, Pakistan and South Korea.

But it was China, not the United States, that boosted its military spending the most in recent years. Last year, China spent an estimated $188-billion (measured in terms of purchasing power parity), the institute said in its annual report released yesterday in Stockholm.

By that measure, Beijing is now the world’s second-biggest military spender, well ahead of India, Russia and Britain. Even when China ’s spending is expressed at the official exchange rate, widely viewed to significantly undervalue the yuan, it drops to an estimated $50-billion, which tops Asian countries in spending.

(Chinese spending is also skewed by the relatively low cost of paying a huge conscript army where each of 2.2 million soldiers gets paid the equivalent of less than $100 a month).

There’s little good news in the institute’s 2007 yearbook. The brief decline in post-Cold War defence spending has been eclipsed by significantly greater military expenditures, up 37 per cent in the past decade.

The so-called war on terror is largely responsible for soaring military expenditures by the United States and some of its allies.

Still, China’s ambitious push to transform its military from an unwieldy conscript-based army into a powerful, modern force capable of projecting power throughout Asia and beyond is also redefining the military balance.

“In 2006, China’s military expenditure continued to increase rapidly, for the first time surpassing that of Japan and hence making China the biggest military spender in Asia,” the report said.

Last year, China also successfully destroyed an orbiting satellite with a missile, pushing the arms race into space. It is also investing massively in new warships and longer-range combat aircraft.

Even Beijing’s own official figures, almost universally regarded as massively understating Chinese military spending, called for an 18-per-cent increase this year.

Washington and Beijing are in a war of words, both accusing the other of unnecessary military spending.

Beijing still lacks “the military capability to accomplish with confidence its political objectives on the island [of Taiwan] particularly when confronted with the prospect of U.S. intervention,” a Pentagon report on China’s military power concluded last month.

China shot back, claiming the Bush administration was “in pursuit of absolute military advantage” despite already having “the world’s most powerful military.”

Yesterday’s report ranged far beyond the big arms spenders.

“There are roughly 1,700 tonnes of highly enriched uranium and 500 tonnes of separated plutonium in the world, sufficient to produce over 100,000 nuclear weapons,” it noted.

The institute also reported that the world’s poorest countries tended to spend the most on defence. “The ratio of military spending to social spending was found to be highest in those countries with the lowest per-capita incomes,” it said.

“It is worth asking how cost-effective military expenditure is as a way of increasing the security of human lives,” said Elisabeth Skons, who headed the team compiling the report. “Millions of lives could be saved through basic health interventions that would cost a fraction of what the world spends on military forces every year.”

The Big Spenders

The United States still has the world’s highest military budget, but China is coming up fast. Figures in U.S. dollars.

Top Five Military Spenders (2006)

*Expenditure in U.S. dollars, at constant 2005 prices and exchange rates. **Estimated figure.

SOURCE: SIPRI YEARBOOK 2007