China’s Increasing Defence Expenditure is a Cause for Concern

While India’s defence budget for financial year (FY) 2011-12 has remained unchanged in inflation-adjusted real terms (1,64,425 crore, US$ 36 billion), the People’s Liberation Army (PLA) of China has been given a 13 per cent increase in planned defence expenditure to US$ 91.5 billion). Though China’s official defence expenditure (ODE) is now about 1.5 per cent of its GDP, China’s GDP has been growing consistently at over 10 per cent per annum. Consequently, given its low inflation base and a strong Yuan, China’s defence expenditure has grown at over 10 per cent annually in real terms over the last decade.

Chinese analysts invariably claim that the rather steep hike is “caused by the sharp increase in the wages, living expenses and pensions of 2.3 million People’s Liberation Army officers, civilian personnel, soldiers and army retirees.” However, other defence analysts look at the spectacular anti-satellite test successfully conducted by China in January 2007, pictures of the first Chinese aircraft carrier under construction, the acquisition of SU-30 fighter-bombers with air-to-air refuelling capability, the drive towards acquiring re-entry vehicle technology to equip China’s ICBMs with MIRVs, a growing footprint in the South China Sea and cannot not help wonder whether a 21st century arms race has well and truly begun.

China’s military aims and modernisation strategy were clearly enunciated in the Defence White Paper of December 2006. “The first step is to lay a solid foundation by 2010, the second is to make major progress around 2020, and the third is to basically reach the strategic goal of building informationised armed forces and being capable of winning informationised wars by the mid-21st century.”

Due to China’s vigorous military modernisation drive, the military gap between India and China is growing every year. India needs to invest more in improving the logistics infrastructure along the border with Tibet, in hi-tech intelligence, surveillance and reconnaissance (ISR) systems for early warning and in generating land- and air-based firepower asymmetries to counter China’s numerical superiority. India also needs to raise and suitably equip more mountain strike divisions to carry the fight into Chinese territory if it ever becomes necessary.

All of these capabilities will require a large infusion of fresh capital. India’s growing economy can easily sustain a 0.5 to 1.0 per cent hike in the defence budget over a period of three to five years, especially if the government shows the courage to reduce wasteful subsidies.

China’s overall aim is to close the wide military gap between the PLA and the world’s leading military powers, particularly in hardware designed to provide strategic outreach capabilities. Consequently, India must enhance its investment in modernising its armed forces so that they are not found wanting in case of another conflict in the Himalayas in future, both in terms of the adequacy of force levels for carrying the conflict into Tibet and the military hardware (firepower, crew-served weapons and C4I2SR), that is necessary to fight at altitudes above 11,000 feet on the Tibetan Plateau.