China hikes defence budget by 7.2 per cent to USD 232 billion amid rivalry with US, frictions with neighbours

China on Tuesday increased its defence budget by 7.2 per cent to USD 232 billion as it continues with the massive modernisation of its military amid prevailing tensions over Taiwan, the South China Sea, border frictions with India and increasing rivalry with the US. China, which is the second highest spender on defence after the US, has allocated 1.67 trillion yuan (about USD 232 billion) for defence spending. The US defence budget for the last year amounted to USD 886 billion.

The increase in terms of the percentage of China's defence budget was the same as last year. China last year hiked its defence budget by 7.2 per cent to 1.55 trillion yuan (about USD 225 billion), marking the eighth consecutive year of increase in its military spending. Like its previous budgets, this year's defence budget of China was almost three times higher than that of India.
India's defence allocation this year amounted to Rs 6,21,541 crore (about USD 74.8 billion). While hiking the defence budget, China proposed a modest around five per cent target this year for the growth of its economy which is in a slowdown mode.

China has simmering territorial disputes with some of its neighbours. China views Taiwan as a rebel province that must be reunified with the mainland, even by force. Beijing claims most of the South China Sea, while the Philippines, Vietnam, Malaysia, Brunei and Taiwan have counterclaims.

In recent months, tensions simmered between China and the Philippines as Manila, backed by the US, stepped up efforts to assert its rights over the part of the South China Sea firmly resisted by the Chinese coast guard ships. China is yet to resolve fully the eastern Ladakh standoff with India in May 2020 as a result of the action by its military which caused the Galwan Valley clash that marked the most serious military conflict between the two sides in decades.

Proposing the defence budget hike in the National People's Conference (NPC), China's parliament, Premier Li Qiang said the armed forces will strengthen all-around military training and combat readiness, make well-coordinated efforts to improve military preparedness and devote great energy to training under combat conditions, to firmly safeguard China's national sovereignty, security, and development interests. “We will modernise the military governance system, advance military development as outlined in the 14th Five-Year Plan, and speed up the implementation of major defence-related projects," he said in his first work report submitted to the NPC on Tuesday attended by President Xi Jinping.

Also, China's current proceeding of the NPC in which substantial Chinese military personnel are delegates, is keenly watched this year due to recent purges of the military carried out by Xi, who heads the powerful Central Military Commission (CMC) the overall high command of the People's Liberation Army (PLA). Last October, China abruptly dismissed Defence Minister Gen Li Shangfu reportedly for corruption. Before becoming the Defence Minister, Li headed the country's Rocket (missiles) force, a key organ of the military.

After that, nine generals, including top commanders, from the rocket force have been removed from the NPC for suspected “violations of discipline and the law” – usually a euphemism for corruption. Observers say while there is no imminent plan of war for China to expand its defence budget, Beijing is expected to continue “buying time”, meaning steady growth in military spending to build up capacity so that it can achieve its goal of reunification with self-ruled Taiwan, and to narrow the military power gap with the United States. But the budget is also expected to take into account the risk of an armed conflict triggered by something “unpredictable”, with more military encounters in the disputed South China Sea, Taiwan electing a new independence-leaning president in January, and a possible comeback of Donald Trump (as president) in the US, a report in the Hong Kong-based South China Morning Post said.

The PLA has a target of 2027 – the year of its centenary – to achieve its costly modernisation goals, paving the way for it to become a “world-class” military power by 2049. Li said the government will consolidate and enhance the integration of national strategies and strategic capabilities, refine the system and layout of defence-related science, technology, and industries, raise public awareness concerning national defence, and strengthen national defence mobilisation and readiness of reserve forces, he said. “We in governments at all levels will provide strong support to the development of national defence and the armed forces and strengthen mutual support between civilian sectors and the military, so as to consolidate the unity between the military and the government and between the military and the people," he said.

On Taiwan, Li said: “We will implement our Party's overall policy for the new era on resolving the Taiwan question, stay committed to the one-China principle and the 1992 Consensus, and resolutely oppose separatist activities aimed at “Taiwan independence” and external interference”. “We will promote the peaceful development of cross-Strait relations, be firm in advancing the cause of China's reunification, and uphold the fundamental interests of the Chinese nation”, he said.