China to double military budget by 2015 - Report/ENG

DHARAMSHALA, February 14: China's defence budget is expected to almost double by 2015 and outstrip the combined defence spending of all of her neighbours according to defence forecasts.

Global research group IHS has forecasted Beijing's military expenditure will double from its 2011 US$119.8 billion to US$ 238.2 billion by 2015 and in the course exceed the US$ 232.5 billion spent by the region's 12 key defense markets, including Japan and India.

Such an increase would see defence spending rise to 2.18 per cent of China's gross domestic product by 2015, from 1.51 per cent in 2011, according to IHS.

"Beijing has been able to devote an increasingly large portion of its overall budget towards defence and has been steadily building up its military capabilities for more than two decades," said Rajiv Biswas, Asia-Pacific chief economist for IHS Global Insight.

"This will continue unless there is an economic catastrophe."

The growth in China's defence budget - which averaged 12 per cent annually from 2000-2009 - will benefit from the projected surge in the gross domestic product of the world’s second largest economy in the next three years.

China will use the additional cash to modernise its equipment while reducing its manpower, resulting in a higher amount of funding per member of its armed forces, IHS said in its report, which was released to coincide with Chinese Vice President Xi Jinping's first official visit to the US.

Many of China’s neighbours have expressed concern in the last few years at what they see as Beijing’s more assertive stance on territorial issues, especially over the South China Sea.

China’s military relations with India also haven’t been the smoothest over the last year or two with cancellation of military talks and a series of border intrusions reported by India.

“China’s investment will race ahead at an eye watering 18.75 percent, leaving Japan and India far behind,” said Paul Burton, senior principal analyst of IHS Jane’s Defence Budgets.

In the coming weeks China is expected to unveil another double-digit increase in its defence budget for 2012.

Beijing has always justified increases by arguing they are in line with the pace of its economic growth.

Following the market slump and a series of labour unrests, China last year spent more on “public security” than the military for the first time. Public security, which covers state surveillance of its people and maintaining China’s paramilitary police, received a boost by nearly 14% to the tune of $95 billion.

Spending on China’s internal security is set to increase as well in the future, if China's top security chief Zhou Yongkang were to be believed, who last year warned provincial officials of more unrest in China.