China's defense budget shows Xi's priorities as economy tightens

When china announced 6.6 % incresed in its military budget last week while cutting substantially in other areas, analysts said it made one thing clear: Beijing senses an increasing security threat and is giving the People's Liberation Army the military muscle to deal with it.

President Xi Jinping followed up the multibillion dollar increase with an instruction to the military to "think about worst-case scenarios, scale up training and battle preparedness ... and resolutely safeguard national sovereignty, security and development interests," according to state news agency Xinhua.

The extra pledge of support for the PLA comes as China suffers its worst economic downturn in recent memory due to the devastating Covid-19 pandemic.

2020 will mark the first time in decades that China has not set a growth target for its economy. Last year, Beijing targeted growth in the range of 6% to 6.5%. GDP grew 6.1%, its slowest pace in nearly 30 years.

Then came the coronavirus pandemic and a weekslong economic shutdown throughout much of China. GDP shrank 6.8% in the first quarter, the first contraction Beijing has reported since 1976.

As the economy contracted, external pressures were mounting.

The US military was boosting challenges to Beijing's claims in the South China Sea, including back-to-back naval Freedom of Navigation exercises in April and flights of B-1 bombers, the heaviest in the US Air Force inventory, originating from both Guam and the US mainland.

And when spending numbers for 2020 were announced last Friday, Beijing's priorities were immediately clear.

The military shares in the pain -- its budget increase was the lowest in decades -- but the PLA's pain was minor compared to the blows dealt to other areas of China's government.

For example, the budget was down 13.3% for general public services, down 11.8% for foreign affairs, down 7.5% for education and down 9.1% for science and technology.

"The proposed budget suggests Beijing feels insecure and under siege," said Timothy Heath, senior researcher at the RAND Corp. think tank in Washington.

"The robust spending increase reflects intense anxiety about deepening tensions with China's top competitor, the United States, as well as over the fading hopes for peaceful unification with Taiwan," Heath said.

"Beijing also has ample reason to bolster defense and security spending to manage mounting problems of domestic turmoil in Hong Kong, western provinces, or across the country as unemployment soars and growth slackens due to the effects of the Covid-19 pandemic."

Wu Qian, spokesman for the Chinese Defense Ministry, said Beijing's defense budget was appropriate for the times.

"It can be said that the world is not peaceful," Wu said on the sidelines of the National People's Congress this week.

"China's homeland security and overseas interests are also facing some real threats....

"It is reasonable and necessary that China's defense spending increased moderately and steadily," Wu said.

Comparing with the US

Beijing also touted the military budget increase as its smallest in years, and said the overall number was a fraction of the money spent by some foreign militaries.

In fact, Zhang Yesui, spokesperson for the third session of the 13th National People's Congress, told a press conference last week that "China's total defense spending in 2019 only amounted to a quarter that of the world's largest defense spender.

That largest defense spender is the United States, according to the International Institute for Strategic Studies (IISS).

IISS figures released in February show the US spent $686 billion on defense in 2019 compared with $181 billion by China, No. 2 on the IISS world rankings.

But subsequent studies by analysts at IISS and the Washington-based Heritage Foundation say the gap between the US and Chinese military budgets may be as small as 13%.