CHINA’S MILITARY SPENDING

CHINA BOOSTS DEFENSE BUDGET 11 PERCENT AFTER U.S. "PIVOT"

Chris Buckley

Reuters, March 4, 2012

China will boost military spending by 11.2 percent this year, the government said on Sunday, unveiling Beijing's first defense budget since President Barack Obama launched a policy "pivot" to reinforce U.S. influence across the Asia-Pacific.

The increase announced by parliament spokesman Li Zhaoxing will bring official outlays on the People's Liberation Army to 670.3 billion yuan ($110 billion) for 2012, after a 12.7 percent increase last year and a near-unbroken string of double-digit rises across two decades .

Beijing's public budget is widely thought by foreign experts to undercount its real spending on military modernization, which has unnerved Asian neighbors and drawn repeated calls from Washington for China to share more about its intentions.

Li said the world has nothing to fear, and the money spent on the PLA paled in comparison with the Pentagon's outlays.

"You can see that we have 1.3 billion people with a large land areas and a long coastline, but our outlays on defense are quite low compared to other major countries," Li told a news conference before the annual full session of the National People's Congress, the Communist Party-controlled legislature that will approve the budget.

"China's limited military power is for the sake of preserving national sovereignty, security, and territorial integrity," said Li, a former foreign minister. "Fundamentally, it constitutes no threat to other countries."

Asian neighbors, however, have been nervous about Beijing's expanding military, and this latest double-digit rise could reinforce disquiet in Japan, India, Southeast Asia and self-ruled Taiwan, which China considers part of its territory.

Obama has sought to reassure Asian allies that the United States will stay a key player in the area, and the Pentagon has said it will "rebalance toward the Asia-Pacific region".

"Eleven percent, for a Chinese defense budget, is what I would characterize as a reasonably sizeable increase," said C. Uday Bhaskar, a former director of India's Institute for Defense Studies and Analyses in New Delhi.

"It also, I would say, goes beyond the normal pegging we do for inflation, and it would be noted with great interest and concern by China's principal interlocutors," he said.

Obama's proposed budget for the fiscal year of 2013 calls for a Pentagon base budget of $525.4 billion, about $5.1 billion less than approved for 2012.

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