China Defence Budget Could be Far Greater than Declared

Defense News - In a global arena where uncertainties abound, one glaring mystery persists—China defense budget, an enigma wrapped in opacity. While the official 2023 defense budget announcement on March 5 touted CNY 1.5537 trillion (USD 224.59 billion), a deeper exploration reveals a disconcerting revelation: the actual expenditure could be several times higher than acknowledged.

The declared 7.2% increase from the previous year, amounting to USD 224.59 billion, underscores China robust defense spending rebound. However, skepticism arises about the credibility of this figure. The inherent lack of transparency in Chinese data, coupled with the absence of independent verification, fuels doubts among global observers.

Senator Dan Sulliva startling revelation to the US Senate in June added fuel to the speculation fire. According to Sullivan, the actual Chinese military budget could hover around USD 700 billion, a figure three times higher than the official declaration. This revelation challenges not only the perceived proportionality to China GDP but also undermines Beijing claim of having a "moderate" defense budget below global averages.

The Pentagon 2023 report cautiously noted that China actual military-related spending in 2022 could significantly exceed the officially announced defense budget. Estimates from UK and Europe-based think tanks suggest that the real 2022 defense budget might be 30-40% higher than the official figure.

The opacity deepens when considering the myriad defense-related expenditures omitted from China formal budget. Internal security forces, such as the People Armed Police (PAP) and the China Coast Guard (CCG), boasting substantial military capabilities, operate outside the official defense budget. The lack of transparency extends to China civil-military fusion strategy, blurring the lines between civilian and military spending.

The perplexity amplifies with China ability to stretch its defense budget further due to a non-market economy, where production costs are significantly lower than in competitive markets like the USA. The concept of purchasing power parity (PPP) further complicates the comparison, suggesting that China outspends the US in real terms when accounting for hidden non-defense spending.

As China navigates economic headwinds, exacerbated by the COVID-19 pandemic, it prioritizes defense spending with a 7.2% increase in 2023, contrasting declines in general public services and modest rises in education expenditure. This strategic emphasis underscores the pivotal role the People Liberation Army (PLA) plays in President Xi Jinping vision for China.

If the speculated USD 700 billion is even remotely accurate, China defense posture becomes more alarming. The narrative shifts from a "moderate" defense budget to a potential veil concealing vast, undisclosed expenditures. With a PLA rapidly modernizing and a decade of doubling defense expenditure, concerns rise about the true intentions behind China military buildup.

As the world grapples with uncertainties, the true extent of China defense spending remains a puzzle, and its implications for regional stability and global security continue to raise questions that demand answers.