A country’s military spending reveals, in addition to its economic might, its strategic intent, and its perception of threats. China recently released its draught military budget for 2023. How does it stack up against India’s defense budget? Because India and China are Asia’s most powerful military rivals, locked in border disputes and a race for dominance in the Indian Ocean, comparisons are unavoidable, even though China has a far larger economy and far broader and more complex military needs and goals.
Any analysis of China’s military spending must begin with a caveat: the numbers released by the Chinese government are never reliable. According to the Centre for Strategic and International Studies, the US estimated Chinese military spending to be more than four times higher than the officially announced budget in 2002. (CSIS). However, the US Department of Defense noted a decade later that China’s real military spending may now be 1.1 to 2 times higher than stated in its official budget. China’s increased integration into the global economy may have increased transparency in its official figures. Nonetheless, China’s official military spending figure is widely regarded as grossly understated.
The absence of a breakdown of numbers — how much China will spend on what — makes China’s military spending opaque. Nonetheless, experts believe the latest budget figure reflects China’s growing military concerns about a variety of issues.
According to the 2023 Budget, China’s defence spending for the year will increase to 1.55 trillion yuan, or roughly $225 billion. This is 7.2 percent more than the budget for 2022, and it is the eighth year in a row that military spending has increased. While China has set this year’s GDP growth target at around 5%, which is lower than expected, defence spending is increasing at a faster rate.
China’s defence spending increased by 6.6% in 2020, 6.8% in 2021, and 7.1% in 2022. The steady increase, particularly at a time when China is struggling to recover from various economic setbacks, indicates China’s strong intent to strengthen its military capabilities. Defence spending is budgeted to account for 5.7% of total government spending in 2023, the third annual increase in that share after more than 20 years of continuous reductions.
China faces a number of military challenges. It is embroiled in a border dispute with India, which has resulted in several military clashes. Western powers are questioning its claim to Taiwan as it assesses its chances of invading the country. Many countries, including the United States, have increased naval and air missions in the disputed South China Sea near Chinese-occupied islands. Japan has abandoned its post-World War II defense-only policy and is now stockpiling advanced offensive weapons.
While the Chinese government has not revealed how it will spend its defence budget, the Chinese Communist Party’s mouthpiece, Global Times, has hinted at significant spending. In 2023, the PLA is expected to commission more advanced warplanes such as J-20 stealth fighter jets and J-16 multirole fighter jets at a time when legacy J-7 fighter jets are being decommissioned, as well as conduct sea trials for the country’s third aircraft carrier, the Fujian, which will be equipped with electromagnetic catapults. China is also expected to conduct more realistic combat-oriented drills, which will consume large amounts of expensive live munitions and fuels. One such exercise was prompted by then-US House Speaker Nancy Pelosi’s provocative trip to Taiwan.
The commissioning of China’s third aircraft carrier, which is expected this summer, as well as the rapid production of new destroyers and fighter planes, as well as investments in space technology and artificial intelligence for missile targeting systems, were expected to be the main areas of spending this year.
How does India’s Defence budget compare to China’s?
China’s military spending, at $225 billion, is less than one-third that of the United States. However, in Asia, China is the largest spender, with a significant spending advantage over other military powers. China’s military spending exceeds not only India’s but also the 13 next-largest military spenders in the Indo-Pacific, which includes India.
China’s defence budget remains more than three times that of India’s. In 2023-24, India plans to spend $72.6 billion on its military, compared to China’s $225 billion. China’s military spending growth of 7% outpaces the targeted economic growth of around 5%, but India is far ahead on this front. Its defence budget is expected to be 13% higher than the previous year, far exceeding the projected GDP growth of less than 7% in the coming fiscal year.
Nonetheless, India’s defence budget is perceived to be low on capital expenditure. Of the Rs 5.94 lakh crore, Rs 1.62 lakh crore has been allocated for capital expenditure on purchasing new weapons, aircraft, and ships, with China’s military spending increasing by 7%. In addition, given the world’s shifting strategic landscape, India’s emphasis on indigenization is evident in its budget, with nearly 75% of defence capital budget earmarked for domestic firms. In budget 2023, India’s defence spending is 13.18% of total expenditure, while China’s is 5.7%, implying that, despite China’s larger and growing military spending, India also shows a strong intent to strengthen its military.
In the end, given the current huge gap and the strength of China’s economy, which is expected to grow further, India cannot hope to match China in military spending in the foreseeable future. When you consider how China understates its defence spending, India should forget about competing with China on defence budget, despite being the world’s third-largest military spender after the US and China. However, because China’s military requirements are greater and more complex than India’s, spending with the appropriate emphasis can provide India with a more credible deterrent against China.
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