China Increases Military Spending 12 Percent: Should We Worry?

Mysterious budget forces U.S., allies to sweat China's 'Great Renewal'

Chinese People's Liberation Army soldiers prepare for the arrival of India's Prime Minister Manmohan Singh and Chinese premier Li Keqiang in Beijing on Oct. 23, 2013.

China plans to spend $132 billion on its military this year.

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In 2012, Chinese President Xi Jinping promised his countrymen that they would witness “the great renewal of the Chinese nation.”

“Nowadays, everyone is talking about the 'China Dream,'" he said while viewing an exhibition at the new National Museum of China, shortly after taking office in November of that year. "In my view, to realize the great renewal of the Chinese nation is the greatest dream for the Chinese nation in modern history."

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Xi stood amid artifacts from the founding of his nation as it exists today, such as the first Chinese version of Karl Marx’ “Communist Manifesto,” and discussed what he called a road to renewal. China would build and develop itself into a prosperous and great nation aligned with the influence of its ancient citizens, he said.

“I believe that by the time when the Communist Party of China marks its 100th founding anniversary, the goal to complete the building of a moderately prosperous society in all respects will be inevitably achieved,” said Xi.

That gives the Asian power until July 1, 2021 to fulfill this destiny. And new reports of its military industrial complex put it right on track.

China plans to spend $132 billion on its military this year, according to the New York Times, continuing an upward trend that adds 12 percent more in spending this year over 2013. The development of its army and navy, all called the People’s Liberation Army, ranks it second in the world for military spending. Its GDP is projected to continue growing at current levels, according to the World Bank, and it raises eyebrows both in its neighborhood and abroad.

The Pentagon’s latest four-year all-encompassing strategy, known as the Quadrennial Defense Review, cites China and its military expansion as a source of danger with regional disputes in Asia turning into military conflict.

“As nations in the region continue to develop their military and security capabilities, there is greater risk that tensions over long-standing sovereignty disputes or claims to natural resources will spur disruptive competition or erupt into conflict, reversing the trends of rising regional peace, stability, and prosperity,” it states. “In particular, the rapid pace and comprehensive scope of China’s military modernization continues, combined with a relative lack of transparency and openness from China’s leaders regarding both military capabilities and intentions.”

It highlights an important point shared among Asia observers who say that the numbers China chooses to release on its internal spending do not represent the complete story. China does not, for example, publicly break down how much it spends on personnel, research and development, operations and maintenance or acquisitions, as the U.S. military does. It’s also unclear how this budget fits into the responsibilities of the Chinese People’s Armed Police, tasked with securing the border and domestic policing, which also received a slight bump in funding this year.

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Pentagon officials are notoriously slippery about classifying their relationship with China. It readily cites the growing threat of its military as just cause for developing space-age weapons to confront it, such as the F-35 Joint Strike Fighter and new stealth ships. These leaders, however, usually stray away from classifications such as “enemy,” opting instead for “rival” or “competitor.”

The latest reports on China’s military spending leave many watchers wondering whether, at a time of massive U.S. budget cuts, whether Americans and their allies should change their tone.

“I see the Chinese as very opportunistic,” says Bonnie Glaser, an Asia expert at the D.C.-based think tank Center for Strategic and International Studies. Glaser, a former Defense official, frequently advises the Pentagon and Foggy Bottom on China issues. “When there are opportunities for the Chinese to advance their interests, they do so. This is a pattern.”

China seized control of the Scarborough Shoals in 2012, despite Filipino territorial claims, and shortly after the Philippines purchased a U.S. Coast Guard cutter among other military modernization moves. In 2013, China almost forced a standoff when it said it would enforce a mandatory identification zone for all aircraft passing through a path of ocean that included islands which Japan claims as its own.

“The Chinese got away with it, and when opportunities present themselves, the Chinese will do more,” says Glaser.

All of this comes as the U.S. continues its “pivot to the Pacific,” an ill-defined plan beleaguered by crises that divert U.S. attention elsewhere in the world. (See: Syria, Iran, North Korea and Ukraine to name a few).

Yet in the Pentagon’s proposed strategy unveiled on Tuesday, its plan for the Pacific remains front-and-center while referencing the war in Afghanistan as all but complete. “Rebalancing to the Asia-Pacific region” is mentioned first among defense priorities in the 21st century, before security and stability in Europe and the Middle East.

Christine Wormuth, the undersecretary of defense for strategy, plans and force development, says U.S. spending on projects related to this rebalance remains front-and-center despite stagnation in the overall defense budget.

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“As we went through the program budget review process, we looked at investment choices through the lens of our strategy,” Wormuth said Tuesday, hours after the release of the $496 billion FY15 budget. “The rebalance to the Asia Pacific was a big part of that.”

Pentagon CFO Robert Hale said its decisions regarding the Pacific were not primarily founded in budgetary restrictions.

Marine Lt. Col. Jeff Pool, a Pentagon spokesman, says the military is “making long-term investments in capabilities that are tailored to support the rebalance and address the challenges posed in the region.”

“Investments in 5th Generation Aircraft, long range strike, undersea platforms, cyber and space, as well as changes in our posture and operational concepts all contribute to an enduring U.S. presence and focus in the Asia-Pacific,” he said.

This comes at a time when the Pentagon may be forced to cut the number of Army troops by as much as 20 percent, and the number of Marines by 8 percent, if the current sequestration continues. 

Despite the U.S. response, China’s announcement Wednesday was designed to send a message.

“Xi Jinping has annunciated the Chinese dream,” says CSIS’ Glaser. “A dream of national rejuvenation, restoring China to its rightful place in the world means having a military that can defend its interests.”