Defense budget to rise by 17.6%
By Zhu Zhe (China Daily)
Updated: 2008-03-05 07:25

The government plans to increase the defense budget by 17.6 percent this year to increase benefits for military personnel, a senior official said yesterday.

The planned allocation for the People's Liberation Army this year is 417.77 billion yuan ($58.79 billion), a rise of 62.379 billion yuan ($8.23 billion) from actual military spending last year, Jiang Enzhu, spokesman for the annual session of the National People's Congress (NPC), told a press conference.

Jiang said the increased amount would be used to raise the pay of service personnel and offset the impact of price hikes. More money will also be spent on education and training.

Military equipment will be "moderately" upgraded to enhance the troops' capability to fight a defensive war based on information technologies, he said.

Jiang called the budget growth a "compensatory" rise, given the low base and the rapid and steady growth of the country's economy and fiscal revenues in recent years.

From 1979 to 1989, defense expenditure registered an average annual decrease of 5.83 percent, and its growth in recent years is still far below the increase in fiscal revenues, he said.

Official figures show China saw an average annual rise of 15.8 percent in military spending from 2003 to 2007, while fiscal revenues grew 22.1 percent on average per year during the same period.

Jiang also noted that China's military spending remains low compared with some other countries, especially the big powers.

Last year, for example, he said, China's military expenditure accounted for only 1.4 percent of GDP, the lowest compared with 4.6 percent in the United States, 3 percent in Britain, 2 percent in France, 2.63 percent in Russia and 2.5 percent in India.

Jiang reiterated that China's national defense policy is defensive in nature.

"China's limited military capability is solely for the purpose of safeguarding independence, sovereignty and territorial integrity, and will not pose a threat to any country," he said.

But Jiang made it clear that Chen Shui-bian and Taiwan authorities are destined to pay a "dear price" if they stubbornly take the dangerous path of "Taiwan independence" in a desperate throw of the dice.

He said the so-called "referendum on UN membership" pursued by Chen is a grave step toward seeking "de jure independence" and will seriously harm peace and stability in the Taiwan Straits and the Asia-Pacific region.

But he stressed that conflicts and disputes could be resolved by equal consultations in the process of peaceful development of cross-Straits relations.

Commenting on the country's defense budget, Luo Yuan, a researcher with the PLA Academy of Military Sciences, said the Chinese army, now in a critical "transitional" period, will naturally need more money for high-tech upgrades.

China still lags behind developed countries by "one or two generations" in major military equipment, he said.

"To narrow the gap, we have to increase input," Luo, who attended the annual session of the country's top political advisory body yesterday, was quoted by the Xinhua News Agency as saying.

He added that in recent years, Chinese troops have also undertaken new tasks such as disaster relief works, and so need more funding.

(China Daily 03/05/2008 page1)