Published: Tue, March 06, 2018
Markets | By Rosalie Gross

China to raise defence budget by 8.1pct in 2018

China to raise defence budget by 8.1pct in 2018

The 2018 defense spending increase comes as China's economic growth expanded 6.9 percent a year ago, the first acceleration in annual growth since 2010.

The defence spending figure is closely watched worldwide for clues to China's strategic intentions as it develops new military capabilities, including stealth fighters, aircraft carriers and anti-satellite missiles.

The armed forces will "firmly and resolutely safeguard national sovereignty, security and development interests", Li said.

China has no desire to overturn the existing global order and its increasingly powerful military does not constitute a threat to others, the spokesman for the country's ceremonial legislature said Sunday.

The 2018 defence spending increase comes as China's economy expanded 6.9 percent previous year, the first annual growth pick-up since 2010.

Chinese Vice Foreign Minister Zhang Yesui on Sunday said China's "moderate" defense spending rises in the past few years are less than other major countries and will not threaten anyone.

China's military planners have also taken note of the USA shift this year in its threat analysis from terrorism to rivals Russian Federation and China, said Yue Gang, a retired colonel and military analyst.

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China's military build-up has rattled the nerves of its neighbors, particularly because it has taken an increasingly assertive stance in its territorial disputes in the East and South China Seas and over Taiwan, which Beijing claims as its own.

This year's defense budget comes to about 1.3 percent of last year's GDP of 82.7 trillion yuan ($12.4 trillion).

President Xi Jinping is attempting to modernize China's armed forces, vowing to turn them into a "world-class force" that is capable of fighting and winning wars.

Analysts don't consider China's publicly announced defense spending to be entirely accurate since defense equipment projects account for a significant amount of "off book" expenditures.

As a proportion of the economy, China's military spending is around 1.9 percent of gross domestic product in 2016, compared with around 3.3 percent for the United States, according to the Stockholm International Peace Research Institute.

"China is committed to a path of peaceful development and China pursues a defense policy that is defensive in nature", he told a news conference. Defending the 8.1 per cent hike, a top Chinese defence expert said, a steady and appropriate growth of defense spending is necessary because the Chinese armed forces have been modernising to keep up with the country's development.

Though China doesn't wish to be seen as a Russian ally, there is a renewed sense of big-power competition, Yue said.

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