Inside Story

Is an India-China arms race brewing?

As Asia’s two rising powers boost defence capabilities, we ask who stands to benefit and what it means for the region.

On Saturday, the Indian armed forces ended a major military exercise near the Chinese border, while China has announced that it will increase its military spending by 11.2 per cent in 2012.

For India, it’s the continental China that is the primary threat and challenge, rather than the maritime China, which is what most western analysts see because they are more concerned with oceanic sea lanes connecting western economies with Asia. This is a secondary priority for India.

– Zorowar Daulet Singh, a research fellow at the Center for Policy Alternatives

The four-day exercise, codenamed “Pralay” or devastation, tested a wide range of defence capabilities.

Almost all major aircraft types operating within the Indian air force were involved in the drill, most of which took place in the disputed state of Arunachal Pradesh.

For years, Sino-Indian bilateral relations have been affected by the dispute over Arunachal Pradesh, a territory bordered on the north by the Tibet region of China. While it has been administered by India as a state since 1987, China still claims most of it as part of the Tibet Autonomous Region.

The exercise also coincided with an official visit by Yang Jeichi, the Chinese foreign minister, to India.

Both the Chinese and Indian governments have recently increased their defence spending.

I don’t think China is trying to be provocative. Its relationship with Pakistan has existed for several decades, since World War II.”

– Richard Hu Weixing, an associate professor at the University of Hong Kong

The two countries share a border that is approximately 4,000 kilometres long.

About 40 per cent of the world’s population live in India and China, and with expanding economies the military stakes are high.

Can an arms race between India and China be in the best interest of either one? Who stands to benefit from it? And, what are the likely ramifications for the Asia-Pacific region?

Joining Inside Story with presenter Adrian Finighan are: Jonathan Holslag, the author of China + India: Prospects for Peace and the head of research at the Brussels Institute of Contemporary China Studies; Zorowar Daulet Singh, a research fellow at the Center for Policy Alternatives; and Richard Hu Weixing, an associate professor at the University of Hong Kong.

“China increasingly … feels like a trapped giant with its diplomatic manoeuvrability being squeezed from all sides. The key question is, to which degree China will adjust its posturing and scale back its robust military manoeuvring offshore in the South China Sea and along the border with India.”

Jonathan Holslag, the head of research at the Brussels Institute of Contemporary China Studies




  • China says it is to increase its military spending by 11.2 per cent in 2012 – to almost $110bn
  • It wants to double that amount by 2015
  • China’s official defence budget is the second-largest in the world, after the US
  • But its actual spending, according to some experts, may be as much as 50 per cent higher because China does not account for its expenditure on nuclear development and other programmes such as space


  • India’s military power pales in comparison with China. Yet, it too is significantly increasing spending on defence
  • The 2012 Indian defence budget was set at $36bn – an 11.6 per cent rise on that of the previous year, but still less than half of that of China
  • India has the tenth-largest military budget on the planet
  • Fifty-one per cent of India’s military budget is spent on maintaining its considerable land army of more than one million people