News stealth frigate F16U by Andrei Pinkov
Type 2000 tank by Andrei Pinkov <Kanwa news March 11th Toronto> China will increase its military spending to 104.65 billion RMB yuan in the 1999 fiscal year with a 15% growth over the previous year. If the decrease in the prices of consumer goods by a 0.8 percentage point is put into consideration, then the actual growth rate in the military spending will get close to 16%. Under the strategic thinking of taking advantage of "the unparalleled superiority", there appeared a tendency of "inclined distribution" in the Chinese national defense spending after the 1990s. That is, under the guiding ideology of "giving priority to the development of the navy and the air force, putting the stress on the development of the strategic missile troops and the special troops of the ground army, and undertaking the moderate development of the space troops", the primary attention has been paid to the equipment of the navy and air force. China has imported from Russia fifty Su27 fighter planes, four KILO-class submarines, and two large Sobnumennui-class destroyers. In the meantime, China has produced on its own 200 Su27 fighter planes and a Luhai-class destroyer of 6000-ton displacement and is now planning to import more than fifty Su30MK fighter bombers. Evidently, the increased military expenditures are mainly incurred in the development of the hi-tech weapons.
As it is very unclear how the military funds are used, there is no way to know specific details. If the "average distribution" method is used for the calculation, the ground army, the navy, the air force, and the Second Artillery (hereinafter referred to as "four services") each receive 26.163 billion RMB yuan. According to the explanations in the so-called "National Defense White Book" China published before, human resources, equipment maintenance, and equipment purchases each account for one third of the total expenditures. In this case, the spending on the equipment purchases by each of the four services amounts to about 8.721 billion RMB yuan, which is equivalent to about 991 million US dollars. Take the Chinese navy alone for example. China will purchase two Sobnumennui-class destroyers this year and next and these two destroyers alone will cost 800 million US dollars. In addition to this, it is possible for China to produce on its own a Luhai-class destroyer of 6000-ton displacement, which will cost at least 200 million US dollars. Furthermore, at least two more Song-class submarines and two Jiangwei 2-class upgraded escort vessels will be made and twelve KA28 anti-submarines helicopters will be imported. Even by rough estimate, the total cost of all the above-mentioned equipment exceeds 1.6 billion US dollars. On the basis of a two-year budget arrangement, it will be 800 million US dollars per year. If a three-year budget arrangement is taken into consideration, then it will come to 533 million US dollars per year. This cost does not even include the upgrading of the existing equipment, the building of auxiliary vessels, and the development of the new SSBN, the SSN, and the new planes for the naval air unit.
As the KWIC estimates, the actual military spending of China may exceed the published budget by at least 30 % to 50%. In addition, it is for the first time that the national defense budget topped 100 billion RMB yuan this year, thus maintaining the growth by two digits for over ten years. However, for a long period of time, the entire military expenditures have only accounted for a little over 1% of the GDP. It is obvious that the economy as a whole is growing continuously and there is a great potential for arms expansion whenever needed. In fact, with the continuously growing economy, it is still possible for China to maintain the annual growth in military spending by 12% to 15% only if the military expenditures are limited to around 1% of the GDP in the future. This fashion of growth in military spending is very similar to that of Japan. That is "to modernize the military equipment on the quiet and without difficulty".
Calculated on the basis of the 15% growth rate, the total national defense spending will reach 82.22 billion US dollars and 132.417 billion US dollars (exchange rate: 1 RMB yuan is equivalent to 8.3 US dollars.) respectively for the 10th Five-year Plan and the 11th Five-year Plan after year 2000. In this way, great changes will take place in the level of the equipment in the Chinese army from 2005 to 2010. (Kanwa news)
