Rise in China's defense budget to outpace economic growth target

BEIJING (Reuters) - China’s 2019 defense spending will rise 7.5 percent from 2018, according to a budget report issued at the opening of the country’s annual meeting of parliament on Tuesday, a slower rate than last year but still outpacing the economic growth target.

The defense spending figure, set at 1.19 trillion yuan ($177.49 billion), is closely watched worldwide for clues to China’s strategic intentions as it develops new military capabilities, including stealth fighters, aircraft carriers and anti-satellite missiles.

The 2019 defense spending increase comes as China’s economic growth target for the year was set at 6.0 to 6.5 percent.

“We will implement the military strategy for the new era, strengthen military training under combat conditions, and firmly protect China’s sovereignty, security and development interests,” Premier Li Keqiang told parliament.

“We will further implement the military-civilian integration strategy, and speed up efforts to make innovations in defense-related science and technology,” he added.

China’s military build-up has unnerved its neighbors, particularly because of its increasing assertiveness in territorial disputes in the East and South China Seas and over Taiwan, a self-ruled territory Beijing claims as its own.

A government spokesman on Monday said China would keep up a “reasonable and appropriate” increase in defense spending to satisfy its national security and military reforms.

On its website, the official People’s Liberation Army Daily said in a report on the defense budget that the armed forces would “focus on supporting national defense and military reform and comprehensively promoting national defense and military modernization”.

Beijing does not provide a breakdown of its defense budget, leading neighbors and other military powers to complain that its lack of transparency has added to regional tensions.

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“China has increased defense spending at a high rate for some time and Japan would like to see a high level of transparency in regard to its defense policy and militarization,” the Japanese government’s spokesman Chief Cabinet Secretary Yoshihide Suga said on Tuesday.

“We will continue to monitor the situation closely and at the same time will look to engage further with China in security dialogue in order to seek clarification.”

Last year, defense spending was set to increase 8.1 percent, compared to a 7 percent rise in 2017, and 7.6 percent in 2016. The five years before that had seen double-digit increases.


China’s defense spending ranks as the world’s second largest, lagging behind the United States. By comparison, U.S. President Donald Trump has backed plans to request $750 billion from Congress for U.S. defense spending in 2019.

But diplomats and military experts say China’s defense numbers probably underestimate true military spending for the People’s Liberation Army, the world’s largest armed forces, which are in the midst of an impressive modernization program overseen by President Xi Jinping.

China says it is committed to peaceful development, and regularly denounces those it says seek to hype up the “China threat” theory.

“China does not export revolution, hunger or poverty and does not interfere in other countries internal affairs. So where does this threat thing come from?” official news portal China Military Online wrote in a commentary on Tuesday.

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Sam Roggeveen, visiting fellow at the Strategic and Defense Studies Center at Australian National University, said the budget figure marked a “substantial increase” in the size of China’s military.

“China has long maintained its military is for the defense of its borders but that definition has broadened over the years,” Roggeveen said. “The West will be very interested to see what the funds are used for, particularly if it used on assets that can project force over great distances.”

China’s military has been particularly focused on democratic Taiwan recently and is nervous President Tsai Ing-wen wants to move the island towards a formal declaration of independence, a red line for China, which views Taiwan as its territory.

Li said China will “resolutely oppose and deter any separatist schemes or activities seeking Taiwan independence, and resolutely protect China’s sovereignty and territorial integrity”.

Tsai, who has repeatedly warned of the threat from Beijing, says she wants to maintain the status quo with China but will defend the island’s security and democracy.

“China repeatedly claims that they won’t give up annexing Taiwan by force, so we are always being very cautious,” Taiwan Premier Su Tseng-chang told parliament on Tuesday when asked by a lawmaker about the Chinese military threat.

“We are not afraid of a fight and we will not challenge (China), but we are ready to fight at all times.”

Reporting by Michael Martina and Ben Blanchard in Beijing; Additional reporting by Gao Liangping, and Colin Packham in Sydney, Tim Kelly in Tokyo and Yimou Lee in Taipei; Editing by Sam Holmes, Michael Perry and Darren Schuettler