China announces military spending increase

China has announced its biggest rise in military spending in three years, a strong signal from President Xi Jinping that Beijing is not about to back away from its growing assertiveness in Asia, especially in disputed waters.

The government said on Wednesday it would increase the defence budget by 12.2 percent this year to $131.57bn, partly to develop more high-tech weapons and to beef up coastal and air defences.

Speaking at the opening of China’s annual session of parliament, Premier Li Keqiang said the government would “strengthen research on national defence and the development of new- and high-technology weapons and equipment” and “enhance border, coastal and air defences”.

“We will comprehensively enhance the revolutionary nature of the Chinese armed forces, further modernise them and upgrade their performance, and continue to raise their deterrence and combat capabilities in the information age,” Li told the National People’s Congress.

The increase follows a nearly unbroken run of double-digit hikes in the Chinese defence budget, second only to the United States in size, for the past two decades.

Japan worried

“This is worrying news for China’s neighbours, particularly for Japan,” said Rory Medcalf, a regional security analyst at the independent Lowy Institute in Sydney.

Those who thought Xi might prefer to concentrate on domestic development over military expansion in a slowing economy had “underestimated the Chinese determination to shape its strategic environment”, he added, according to Reuters news agency.

“The transparency of China’s defence policy and military capacity, or lack thereof, has become a matter of concern for the international community, including Japan,” Chief Cabinet Secretary Yoshihide Suga said, according to AFP news agency.

China and Japan are increasingly locking horns over uninhabited rocky islands each claims in the East China Sea.

Beijing also claims 90 percent of the 3.5 million square kilometre South China Sea, which is believed to be rich in oil and gas. The Philippines, Vietnam, Malaysia, Brunei and Taiwan claim parts of those waters.

The 2014 defence budget is the first for Xi since he became president. The spending increase is the biggest since a 12.7 percent jump in 2011.

China’s military spending has allowed Beijing to create a modern force that is projecting power not only across the disputed waters of the East and South China Seas, but further into the western Pacific and Indian Oceans.

Much military spending likely takes place outside the budget, however, and many experts estimate real outlays are closer to $200bn. The US Defence Department’s base budget for fiscal 2014 is $526.8bn.