China to boost defence spending by ‘about 7%’

China will raise its defence expenditure this year by “about 7 per cent” according to a senior government official, keeping the rise in line with the country’s economic growth, despite an announced 10 per cent splurge on US defence by President Donald Trump.

The rough increase was announced by Fu Ying, spokeswoman for China’s National People’s Congress, the rubber stamp legislature which is to open Sunday and spend the next week debating national policy.

It was not clear whether the announced increase was adjusted for inflation, but it nonetheless appeared to represent the second year in a row of slowing defence expenditures, in line with an expected slowdown in Chinese economic growth.

Every year for the past quarter century the defence budget has grown at a double-digit rate in nominal terms, with China now second only to the US in the global military spending ranks. The precise figure will be provided by Premier Li Keqiang in his address to the NPC on Sunday morning.

The rise in the defence budget presents a confusing picture for analysts — China insists its intentions for the wider Asia region are peaceful, though it continues to develop advanced weapons at a rapid pace.

However, China has often made the point that while its military budgets have increased rapidly, its defence spending is but a small fraction of its gross domestic product. Ms Fu said total defence spending would account for about 1.3 per cent of projected GDP in 2017. 

That is far lower than highly militarised countries such as Israel and Saudi Arabia and even the US, which in 2015 spent 3.3 per cent of its GDP on the military, according to the World Bank.

Mr Trump has asked for a 10 per cent increase in US defence spending this year, adding $54bn to a budget that topped $600bn last year.

Ms Fu said that China must continue to build up its military but this should not be seen as a threat.

“The gap in capabilities with the US is enormous, but China’s military development and construction will continue in keeping with our need to defend our national sovereignty and security,” she said. “The strengthening of Chinese capabilities benefits the preservation of peace and security in this region, and not the opposite.”

Analysts say a full picture of Chinese military spending will be impossible to determine without more information on off-budget procurement, which typically runs at 50 per cent of the total published budget.