China hikes defence spending by 12.7 pc

BEIJING, MARCH 6: Amidst increasing tensions with Taiwan, China on Monday announced a 12.7 per cent hike in its military spending this yea...

BEIJING, MARCH 6: Amidst increasing tensions with Taiwan, China on Monday announced a 12.7 per cent hike in its military spending this year against an expected economic growth of about seven per cent.

Presenting the national budget in the National People’s Congress (Chinese parliament), Finance Minister Xiang Huaicheng said expenditures for national defence will total 120.5 billion Yuan (over $ 14.5 billion), an increase of 12.7 per cent over last year’s figure.

In 2000, China’s defence spending is expected to be about 1.37 per cent of Gross Domestic Product (GDP) and 8.2 per cent of budgetary expenditure.Xiang told Chinese lawmakers that this 12.7 per cent increase in defence expenditure was appropriate for the People’s Liberation Army (PLA) for maintaining state security and was consistent with the increase of recent years.

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He did not give a break-up of military spending. However, defence analysts said actual Chinese defence spending could be at least ten times the published figure.

The increased defence outlay will mainly cover the increased salaries and allowances for officers and soldiers of the 2.5 million strong People’s Liberation Army as well as cost of stationing Chinese troops in the recently-retrieved Portuguese colony of Macao, Xiang said.

The official Xinhua news agency defended the hike for the world’s largest military saying that China has kept its defence outlay at a "low level" as compared with the averages of three per cent and 15 per cent respectively for the world’s main countries.