China raises defence budget by 7 pc while provinces crumble under debt

By Manish Anand

New Delhi, March 10: China is raising war chest at a time when world powers have taken one-upmaniship as a new normal in the geopolitics. China has proposed to raise the defence budget by seven per cent for the current fiscal. At $231, the defence budget of China is fast matching up with the spending on military by the US worth $858 billion, excluding the assistance extended to Ukraine.

China claims that it maintains a single digit growth in its defence budget. But the size of its defence budget is way ahead of others. India allocated a total of $78 billion for the defence budget in the current fiscal, which was about 4.5 per cent above the last financial year.

However, China is raising defence budget to record levels at a time when several of its provinces are battling high debt. The principal source of revenue for the Chinese provinces used to be revenue by selling land. This has nose-dived in the aftermath of the Covid-19.

China Daily quoted Lou Qinjian, saying that “China has maintained a comparatively low military expenditure”. Lou was the spokesman for the second session of the 14th National People’s Conference (NPC). He claimed that China always pursues a peaceful development path.

Lou told reporters in a post-NPC press met that the defence budget is meant to “better safeguard our sovereignty, security, and development interest”. He also added that the enhanced defence spending will meet the “need of military transformation with Chinese characteristics”. Lou also stressed on “China’s international responsibilities”.

The Financial Times in a report quoted a report by Goldman Sachs, saying that the local governments in China are now sitting over a debt of $13 trillion. The financial daily also stated that Xi Jinping administration is bailing out the provincial governments from facing possible default, as repayments loom for them in the near future.

China keeps stepping up defence budget amid the global concerns that Xi will follow in the footsteps of Russia’s President Vladimir Putin to mount a military expedition to take control of Taiwan. Besides, China is already prolonging eyeball-to-eyeball situation across the line of actual control with India in the Indian eastern sector.

While China is run by an opaque administration, the defence watchdogs remain skeptical about the real size of the defence spending by the Communist regime. The China Power quoted a report by Stockholm International Peace Research Institute (SIPRI), which claimed that Beijing’s total defence spending in 2022 was to the tune of $292 billion. It also quoted the International Institute for Strategic Studies (IISS) which claimed that the actual defence spending was $319 billion.

The FT reported that the Chinese provincial governments were busy negotiating with large banks for a rework of the existing debt on the sidelines of the 14^th NPC. With mounting public debt amid pumping of defence spending, Xi appears walking in the footsteps of Putin to make strategic gains from the global disorder.   

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About The Author

Manish Anand

Manish Anand is a senior journalist with more than two decades of hardcore reporting on beats such as Prime Minister’s Office, Parliament, BJP, Congress, Planning Commission, NITI Aayog, and scores of Union Ministries.

His past has been with The New Indian Express, The Asian Age/Deccan Chronicle, and The Statesman.

For about 15 years, Manish was also a regular commentator and host for talks on AIR on foreign affairs.

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