China unveils new defense budget, with a 7.2% increase

CHRISTCHURCH, New Zealand – China will increase its defense budget by 7.2% for 2024, the government announced March 5 during the second annual session of the 14th National People’s Congress.

The new budget amounts to almost 1.7 trillion yuan ($236.1 billion) and continues the recovery from the COVID-19 pandemic. The budget had grown by 6.6% in 2020, the lowest rate of increase in almost three decades.

“The percentage increase is the same as last year, and [it’s] the third year in a row in which we see an increase of 7% or more,” Meia Nouwens, senior fellow at the International Institute for Strategic Studies think tank, told Defense News.

China’s military spending is about four times that of Japan and about twelve times that of Taiwan. Beijing considers the latter island nation a rogue province and has threatened to take back the country by force.

“China notes that the defense budget as a percentage of GDP [gross domestic product] lower than that of the US or NATO. Of course, the official Chinese defense budget does not include all areas related to defense,” said Nouwens.

Actual Chinese defense spending is likely to be higher than what has been officially announced. For example, the space program, which is managed by the military; defense mobilization funds; operating costs of the provincial military base; military pensions and benefits; dual-use research and development efforts; and paramilitary organizations such as the People’s Armed Police and the Coast Guard are not included in the defense budget.

The Stockholm International Peace Research Institute think tank estimated that China’s actual defense budget in 2022 was 27% higher than what the country reported.

The government also said it targets economic growth of around 5% in the coming year, with defense expansion well above this level. This represents President Xi Jinping’s continued prioritization of “the Chinese Communist Party’s security objectives, including pursuing control of Taiwan while tightening its belt elsewhere,” said Andrew Erickson, professor of strategy at the US Naval War College.

However, the growth in defense expenditure is lower than the total increase in government expenditure of 8.6%. On the other hand, it is higher than in other sectors, such as public safety, where expenditure increased by 1.4%.

“The run-up to the National People’s Congress was filled with numerous articles citing Chinese officials or commentators hinting that the increase would be reasonable and low,” Nouwens said. “It’s interesting to think about the purpose behind that message – whether it was intended for a domestic audience or a foreign audience, or both.”

“China’s economic context has not necessarily improved, and the government may have wanted to send signals that they are not overspending on defense at the expense of other budgets. For example, the education budget has only increased by 5% this year,” she added, noting that there was, however, a larger increase in the science and technology budget.

The People’s Liberation Army is not benefiting from double-digit percentage increases compared to a decade ago, but Chinese defense spending has multiplied by a factor of 2.3 since 2013.

In providing budget documentation to political dignitaries, Premier Li Qiang urged the government to “thoroughly implement Xi Jinping’s thoughts on strengthening the military, implement the military strategic guidelines for the new era, adhere to to the Party’s absolute leadership of the people’s army… and fighting hard to achieve the 100-year goal of establishing the army.”

The PLA’s centenary will take place in 2027, and by then Xi wants to have built “a modern army.”

Li’s same report uses the phrase “peaceful reunification” in reference to Taiwan. China carried out more than 1,700 missions in Taiwan’s air defense identification zone last year, compared to almost 800 in 2021.

Li also outlined a greater readiness for war through an expansion of reserve forces, plus a pledge to improve defense-industrial capacity and coordination. Political loyalty has also been highlighted following an ongoing anti-corruption campaign that has brought in two defense ministers and several generals in recent months.

Gordon Arthur is an Asia correspondent for Defense News. After working in Hong Kong for twenty years, he now lives in New Zealand. He has attended military exercises and defense exhibitions in about twenty countries in the Asia-Pacific region.

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