China to increase defence budget by 12.7 per cent

China announced that it will hike its defence spending by 12.7 per cent, raising it to a staggering 601 billion yuan.

Beijing: As concerns mount globally over its
military build-up, China today announced that it will hike its
defence spending by 12.7 per cent, raising it to a staggering
601 billion yuan (USD 91.5 billion), signalling the country`s
return to double-digit military growth after a short lull.

The increase in the draft defence budget focuses towards
military hardware upgrade and modernisation, military
training, human resource development and improving the living
standards of the Red army, said Li Zhaoxing, spokesman for the
annual session of China`s national legislature.

The hike in military spending comes a day ahead of the
opening of the National People`s Congress which is to chalk
out the country`s new social and economic goals.

The raise also comes at a time when the Chinese military
has embarked on development of new weapons system like carrier
killer and space missiles, aircraft carrier and new range of
nuclear submarines.

China spent about USD 77 billion last year as defence
expenditure, which was an increase of 7.5 per cent compared to
2009`s budget.

Defending the 12.7 per cent increase this year, Li, the
former Chinese Foreign Minister said, the ratio of China`s
military spending in its total gross domestic product (GDP) is
lower than many countries, including India.

When asked about concerns in India and other neighbouring
countries over steady increase of China`s defence budget, Li
said while China`s military spending amounted to about 1.4 per
cent of its GDP, "that ratio in India is much higher than two
per cent as far as I know."

He said China is willing to maintain friendly relations
with neighbouring countries such as India in spite of the
increase of its defence spending.

China and India have reached a consensus on maintaining
peace and tranquillity of their border areas before border
issues are eventually settled, Li said.

China is ready to work with India to implement relevant
agreements to maintain a stable situation in border areas,
which is conducive to the interests of the two countries, he

"It is true that China`s defence budget is raised a bit,
but the ratio of the defence spending in the country`s GDP
remains very low, much lower than those of many other
countries," he said.

"The government has always tried to limit military
spending and it has set the defence spending at a reasonable
level to ensure the balance between national defence and
economic development," Li said.

The former foreign minister said China`s defence
expenditure is transparent and defensive in nature.

"There is no such thing as the so-called hidden military
expenditure in China, and the budget is subject to auditing
from the government and military," he said.

"China is committed to peaceful development and a
national defence policy that is defensive in nature," Li said.

Li said, compared to the world`s average, China`s
military spending is low given its 1.3 billion population and
vast land and long coastal lines.

"The limited military strength of China is solely for
safeguarding its national sovereignty and territorial
integrity and would not pose a threat to any country," Li told
state run Xinhua news agency.

Commenting on China`s defence allocation, Major
General Luo Yuan, a researcher with the Chinese People`s
Liberation Army (PLA) Military Science Academy said China`s
military spending is dwarfed by that of the United States
which, at 725 billion US dollars, accounted for about 4 per
cent of the country`s GDP for the 2011 fiscal year.