What to Make of China’s Military Spending?

Much attention is given to the annual announcement of China’s defense budget, which last week’s budget report indicated would grow about 11% to about US$115 billion this year, and the RAND corporation’s Scott Harold writes that the figure “posed more questions than it answered.” From CNN:

The details of how Beijing plans to allocate its 2013 defense outlays are unknown, but China’s neighbors are hungry for answers.

If the increased expenditures are dedicated to acquiring power projection capabilities such as research on new weapons systems, improved cyber warfare abilities, procurement of more land-attack missiles and anti-satellite weapons, acquisition of stealthy armed drones, submarine-building, or procurement of air- and sea-lift capabilities that could be used to invade Taiwan, China’s neighbors would likely be anxious. In contrast, if such funds are spent primarily on ground force modernization and air defenses – systems more defensive in nature – they would likely be less concerned. If such funds go primarily towards the construction of improved barracks housing, food, clothing, energy costs and salaries for enlisted soldiers, sailors, and aviators, the region would be less worried still.

But the reality is that foreign observers are unlikely to know how these funds are spent for some time to come, if ever. China’s political system gives little oversight of the military budget to legislators, civil society, or the media, leaving it to the top leadership of the Chinese Communist Party and the People’s Liberation Army alone to decide how defense funds are spent and to release only such information on funding allocation as they see fit. This lack of transparency and accountability also means some military funds are almost certainly siphoned off in corruption.

While they agree that China’s limited transparency about the specifics of its defense budget is concerning, scholars Andrew Erickson and Adam Liff point out that chatter about the issue in the domestic and foreign media can distract from the real picture and hinder the possibility of a proper policy debate. In the Diplomat, they lay out some of their key findings from several years of research based on Chinese-language commentary:

The People’s Liberation Army (PLA) increasingly has the resources, capabilities, and confidence to attempt to assert China’s interests on its contested periphery, particularly in the Near Seas (Yellow, East, and South China Seas). This development has the potential to seriously challenge the interests of the U.S., its allies, and other partners in the region, as well as access to and security of a vital portion of the global commons—waters and airspace that all nations rely on for prosperity, yet which none own. That’s why the PLA’s development matters so much to a Washington located halfway around the world.

Yet beyond China’s immediate periphery the actual impact of PLA spending growth overall may be far less impressive than the headline numbers suggest. The PLA would need far greater resources and capabilities to pursue high-intensity combat capabilities much further away from China’s borders and the territory it claims. At least at present, Beijing is not prioritizing such capabilities. There’s no need to wait for China to achieve full transparency to see this; manifest trends, properly interpreted, speak for themselves. Meanwhile, the development of lower-end capabilities useful for humanitarian assistance and disaster relief, as well as protection of sea lanes against non-state actors, bode well for the PLA’s growing role in cooperative security. Hence, even as the Near Seas become more contested, there is significant potential to build on nascent developments in more distant waters—where Beijing has no claims—and further cooperation among China, the U.S., and other nations.

These are the key characteristics of China’s military development. Properly understood, they can inform constructive responses in a challenging time. Misunderstood and conflated, they can confuse and inflame.

Erickson and Liff’s full article on the subject, called “Demystifying China’s Defense Spending: Less Mysterious in the Aggregate,” will appear in a forthcoming issue of peer-reviewed The China Quarterly and can be downloaded in its accepted manuscript form via Liff’s web site at Princeton University.