China's Defense Spending More Than $30 Billion, General Says

Posted in China | 11-Mar-05 | Source: Bloomberg

Chinese soldiers parade during an inspection ceremony at a training base in Xiangfan, central China's Hubei province March 1, 2005.

March 10 (Bloomberg) -- China's defense-related spending is higher than the $30 billion military budget for 2005 announced by the government on March 4, a Chinese general in charge of developing weapons systems said.

``You can't put all the projects under the same defense budget,'' Lieutenant General Hu Shixiang, also deputy director of China's space program, said in an interview yesterday in Beijing. ``There are military uses for many civilian scientific research projects.'' Hu declined to give an estimate for total spending.

China will raise military spending by 13 percent this year, the biggest increase since 2002, as the Chinese parliament prepares to pass a law that would sanction the use of force to prevent Taiwan from declaring independence. China's actual defense spending is as much as four times the official figure, Taiwan-based military analyst Andrew Yang estimates.

``We must spend more in order to prevent Taiwan independence,'' said Major General Kui Fulin, deputy director of the People's Liberation Army General Staff. The Chinese army wants a bigger military budget, Kui said.

China on March 7 unveiled a draft law that would allow the use of force against Taiwan, a selfgoverning island off the southeast Chinese coast, in the event that efforts to secure peaceful reunification are exhausted. China and Taiwan have been ruled separately since the Communists won a civil war in 1949.

Growth Factor

China's anti-secession law is ``disconcerting,'' Admiral William Fallon, U.S. Pacific Forces Commander, told the Senate Armed Services Committee on March 8. The U.S., Taiwan's chief defense ally, opposes the European Union's proposed lifting of an arms embargo on China, imposed after the government crushed pro- democracy protests in Beijing's Tiananmen Square in 1989.

``Military spending rises in accordance to the nation's economic growth,'' said General Kui, who spoke in an interview at the National People's Congress in Beijing. ``I personally think having more military spending is better, but the nation can't afford it. We hope to get more money to spend in the future''

China's economic growth accelerated to an eight-year high of 9.5 percent last year. Asia's secondlargest economy has almost tripled in size in the past decade. This year's increase in the military budget is bigger than the 7.6 percent growth in central government spending projected in the 2005 budget.

`Still Small'

China's military budget, including dual-use scientific research, is ``still small'' compared with other major powers, said General Hu, who is deputy director of the People's Liberation Army's General Armament Department, which is in charge of buying and developing weapons systems.

China's military spending as a percentage of gross domestic product would rise to an estimated 7.5 percent, from 2 percent, if other programs were included, said Yang, secretary general of the Chinese Council of Advanced Policy Studies, a Taipei-based research group that studies the Chinese army. China's defense spending has growing at an annual rate of between 15 percent and 20 percent for the past decade, according to Yang.

Lawmakers are scheduled to pass the anti-secession bill on March 14, when China's parliament concludes its annual session.

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Allen T. Cheng in Beijing at

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Bruce Grant in Hong Kong at