China's military power

Parliament spokeswoman Fu Ying, who announced the official military budget increase to about $145 billion, said on March 4 that the hike is aimed at modernizing and improving conditions for the 2.3 million-member People's Liberation Army (PLA).

Fu said that China has a tougher road to travel than other large nations in terms of national defense modernization, adding that "we can only rely on ourselves for research and development of most of our military technology."

The decision, which would mark the fifth straight year of double-digit increases in spending for the world's largest military, comes as Beijing is involved in territorial disputes with neighboring countries in both the East and South China Seas.

Many analysts believe that China's growing assertiveness and aggressive tactics in the region are drawing other countries closer together.

Sam Perlo-Freeman, director of the military expenditure and arms production program at the Stockholm International Peace Research Institute, talks in a DW interview about how China uses the money and the message Beijing is sending out to its neighbors.

DW: Why is China announcing yet a further increase in military spending?

Dr Sam Perlo-Freeman: China has been seeking to modernize their military for a very long time. Increased spending is in part a natural result of a growing economy, where soldiers and officers would be expected to share in generally rising incomes, and indeed there have been significant increases in military salaries over the years.

But the other aspect is China's realization in the 1990s and early 2000s of just how far behind the United States it was technologically, so that the country was in a position where the US completely dominated them in terms of military capability in China's own region, which for China was a very insecure situation to be in.

Is the increase in defense expenditure higher this year than before?

The 10 percent is in line with broad recent trends. With a projected inflation rate of 2.5 percent, the real-term increase works out at about 7.3 percent, which is only slightly above what is expected to be the country's economic growth target of 7 percent.

So it will leave China's military spending as a share of GDP more or less unchanged. Last year, the 12.2 percent increase (about 9.7 percent in real terms) was a bit faster than GDP growth, but the overall trend over the years has been for military spending to keep pace with GDP growth. So the latest announcement continues this trend.

What exactly is the money set to be spent on?

China does not provide a breakdown of military expenditure between the army, navy, air force and second artillery. Sometimes they provide a breakdown into the broad categories of Personnel, Training & Maintenance, and Equipment.

These categories are always roughly a third each of the budget. So spending increases go both towards modernization of equipment, improving pay and conditions of troops, and general running costs.

Increased spending on equipment development and acquisition has been happening across the board, on land, sea and in the air, although there is more of an emphasis now on the maritime and air domains compared to in the past, where the overwhelming focus was on the land army.

But the central theme of military modernization is "informationization," that is, bringing to bear modern IT and communications technologies into the military, in line with modern western war-fighting technology.

How do these changes improve China's defense capabilities?

A recent RAND study found that, while China's military capabilities are certainly increasing, there are some doubts about how this is translating into actual war-fighting capability. The ability to conduct joint operations between different parts of the armed forces is in particular still uncertain.

Endemic corruption in the armed forces is also of serious concern to the Chinese leadership as something that could severely impact their war-fighting capabilities, as well as of course leading to wasted resources.

What does this move reflect about the way China wants to project itself in the region and the world?

China is being a lot more assertive in the region in pressing its territorial claims, although this is at a very low level of employment of force: establishing a strong presence in disputed areas, in general, mostly with law enforcement vessels rather than naval, but backed up with their increased naval capabilities.

Beyond the region, the Chinese are developing more of an ocean-going naval capability, for example in the Indian Ocean, where they have been very active - in a cooperative way with other countries - in tackling maritime piracy, sending vessels to participate in these efforts.

But they are also interested in having these capabilities to be able to defend Chinese trade and investment interests, as well as being able to aid Chinese citizens abroad. An example of this is the evacuation of Chinese citizens from Libya in 2011.

What message is Beijing trying to send to both the region, especially given the recent territorial disputes with some if its neighbors?

In terms of the implications for the region - while China's drive for modernization may have originally been driven by insecurity, now that they have a greatly increased level of capability they are taking a much more assertive stance, some would say aggressive, in relation to regional territorial disputes, such as in the South and East China Seas.

There is absolutely no indication that they either want or expect an armed conflict, which could be disastrous economically, but they do seem to be seeking to use their greater power to influence the situation on the ground (or in the water), especially in the South China Sea where Chinese paramilitary "law enforcement" vessels are exerting a much more powerful presence.

China's official military spending is still less than a third of the US defense budget. Is this number accurate?

SIPRI makes estimates of China's full military spending, which tend to be a little over 50 percent higher than the official budget. The two biggest elements of what we add to the official budget are 1) estimated additional R&D spending and 2) spending on the paramilitary People's Armed Police. Others include demobilization payments to soldiers in the Ministry of Civil Affairs budget, and estimated additional military construction investment.

What reactions are China's regular increases in military expenditure causing in the region?

This is leading to responses in some neighboring countries in terms of increased military spending and acquisitions, including Japan, which has started to increase spending gradually after many years of decline, Vietnam, which has been increasing spending very rapidly boosted by high oil revenues, and has acquired submarines and other naval equipment to seek to counter Chinese power in the area, and the Philippines.

However, given the Philippines' extremely weak military capabilities, they are also turning more to the US to strengthen their alliance with them, as well as to international legal mechanisms, where they are seeking a judgement from the International Court of Justice (ICJ) against China in relation to the South China Sea.

I think the level of increase will not be unexpected in the region. It is more China's actions, in particular in relation to territorial disputes - and of course the actions of other countries, that will determine whether tensions in the region increase.

Dr Sam Perlo-Freeman is Senior researcher and Head of the Project on Military Expenditure in the Arms and Military Expenditure Program at the Stockholm International Peace Research Institute (SIPRI). He is responsible for monitoring data on military expenditure worldwide.