China Military Spending Higher than Expected ?

From DefenseNews

China Military Spending May Be Higher Than Acknowledged

By AGENCE FRANCE-PRESSE

China’s military spending is 40 to 70 percent higher than it officially acknowledges, and is likely to exceed that of any U.S. ally in two decades, according to a study released May 19 by the RAND Corporation.

The study estimated China’s current annual defense spending at between 2.3 and 2.8 percent of its gross domestic product, or between $69 billion and $78 billion in 2001 dollars.

That compares to U.S. defense spending of nearly $430 billion in 2004, which was 3.9 percent of GDP in 2004, it said.

“China’s defense spending has more than doubled over the past six years, almost catching up with Great Britain and Japan,” said Keith Crane, the lead author of the study, “Modernizing Chinas Military: Opportunities and Constraints.”

“Although the rate of increase has slowed, by 2025 China will be spending more on defense than any of our allies,” he said.

The study said Chinese defense industries have grown more efficient; benefited from access to foreign military systems and technologies; and improved the quality and sophistication of domestically produced military goods in areas such as information technology, shipbuilding and defense electronics.

RAND pointed out, however, that the study’s estimates of Chinese military spending, although 40 to 70 percent higher than the official figures, were still considerably lower than other outside estimates.

The report said military spending likely to grow over the next decade because of the sheer heft of the Chinese economy, which is expected to triple in size over the next two decades even as growth rates subside.

On the other hand, the government’s ability to continue increasing military spending will be constrained by rising demand for social services, combined with rising government debt, the report said.

The study was conducted by RAND’s Project Air Force, a federally funded research center that does research on subjects of interest to leaders of the U.S. Air Force.