2009: China’s Military Budget Continues Double-Digit Growth

Red flag to abull defense market As was the case in the communist Soviet Union, China’s official military budget and real military budget are not the same thing. Many items are hidden under other ministries, or simply not reported truthfully in the absence of accountable government. Official figures are given, however, and for the last 20 years those figures have shown uninterrupted double-digit increases. That tradition continues in 2009, as the official budget is set to rise to 14.9% to YUAN 480.6 billion (about $70.2 billion) from the 2008 figure of YUAN 417.77 billion ($58.81 billion). In 2006, the equivalent figure was $35 billion, which means the official budget has doubled over that time. The biggest unanswered questions have to do with the differential between announced and actual figures. RAND’s Project Air Force, which has also studied China’s arms industry modernization, gave a figure of 150% – 200% difference. Other international analysts have estimated the actual budget at up to 400% of the official budget. A related question involves whether or not these differentials are narrowing or remaining stable, as a result of these continuous double-digit increases. SIPRI has side-stepped this issue by using the interesting metric of purchasing power […]