China Copes With Insecurity by Boosting National Security Spending

COMMENTARY Asia

China Copes With Insecurity by Boosting National Security Spending

Mar 14th, 2018 2 min read
COMMENTARY BY
Dean Cheng

Senior Research Fellow, Asian Studies Center

Dean brings knowledge of China's military and space capabilities as a research fellow on Chinese political and security affairs.
Chinese President Xi Jinping shakes hands with deputies from the People's Liberation Army and armed police, March 12, 2018. CHINE NOUVELLE/SIPA/Newscom

Key Takeaways

Continuing a trend that has lasted for more than two decades, the Chinese legislature approved an increase in the budget of the Chinese military.

Clearly, Chinese authorities consider domestic threats to be outpacing external security threats, given the increasing amounts spent on the former.

Policymakers need to keep this in mind as they seek to engage Beijing and/or its neighbors in addressing the challenges of its modernizing military.

Although much of the discussion of the Chinese National People’s Congress has focused on the removal of term limits, effectively extending Chinese President Xi Jinping’s (and Chinese Premier Li Keqiang’s) hold on power, the session also has seen yet another increase in China’s national security spending.

Both developments point to a sense of insecurity in Beijing that American policymakers should watch closely.

Continuing a trend that has lasted for more than two decades, the Chinese legislature approved an increase in the budget of the Chinese military, including the People’s Liberation Army. Next year, the People’s Liberation Army will be able to officially spend 1.107 trillion renminbi, or about $175 billion, marking an increase of 8.1 percent.

Few Western analysts, however, say this figure covers all actual People’s Liberation Army expenditures.

This increased allotment will help sustain the steady, ongoing modernization of the Chinese military, including new ships for the navy, a variety of new aircraft, cruise missiles, and unmanned aerial vehicles for the air force, and nuclear modernization for the People’s Liberation Army Rocket Forces.

It will also help fund the ongoing expansion of Chinese space, electronic warfare, and network warfare (including cyber) capabilities in China’s new People’s Liberation Army Strategic Support Force.

What was revealed at this year’s People’s Congress, however, is that internal security spending has been rising even faster than external security spending. Domestic security expenditures rose 17.6 percent in 2016, and 12.4 percent in 2017. This compares with increases of 7.6 percent and 7.1 percent in the defense budget for those years respectively.

Not only has the rate of increase for spending on internal security been higher than for externally oriented military spending, but actual resources have risen as well. In 2017, for example, China spent approximately $161 billion on the People’s Liberation Army, and spent $196 billion on internal security forces.

These latter figures reflect a combination of national-level and provincial-level expenditures, since Chinese internal security is a shared responsibility between these two levels of government.

This reflects a longer-term trend that was already being reported for several years prior to 2013, when the Finance Ministry ceased disclosing domestic security spending figures. Clearly, Chinese authorities consider domestic threats to be outpacing external security threats, given the increasing amounts spent on the former. This suggests that China’s internal situation is far less stable than the leadership would like the world to believe.

Even more striking is that both Chinese internal and external security spending are now outpacing national economic growth. For the last several years, Chinese gross domestic product growth has been set at about 6.5 percent or less, which is less than the annual increases in both internal and external security spending.

This suggests that Xi has reversed a longstanding position initially set forth by Deng Xiaoping, that Chinese economic development efforts should take precedence over increases in military capability.

As important, it raises questions about how long such a trend is sustainable. If China’s economic growth is, in fact, slowing, then internal and external security spending eventually will compete with other Chinese priorities, from domestic infrastructure development to the Belt and Road Initiative (formerly the One Belt, One Road Initiative). This could have the effect of either changing Chinese priorities or creating greater tensions among them.

Policymakers need to keep this in mind as they seek to engage Beijing and/or its neighbors in addressing the challenges of its modernizing military.

This piece originally appeared in The Daily Signal