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China Again Boosts Defense Budget in Bid to Upgrade Military


BEIJING — The Chinese government announced a 17.6% increase in defense spending Wednesday, matching last year's boost, in a continuing drive to upgrade its military.

Finance Minister Xiang Huai-cheng told China's national parliament that the additional $3 billion was needed to cover the cost of advanced weapons and pay raises for members of the 2.5-million-strong People's Liberation Army, the world's largest military force.

The extra funds will help China "utilize modern technology, especially high technology, to raise our army's defense and combat capabilities," Xiang told delegates of the National People's Congress, the rubber-stamp legislature.

The increase will lift China's stated defense budget to $20 billion, although outside experts say real military spending is at least double or triple that amount, possibly even five times as much. Not included in the official figure are research and development costs and the purchase of foreign arms from countries such as Russia. Moscow is Beijing's main supplier of big-ticket items such as fighter jets and naval destroyers.

Still, military expenditures here pale in comparison to those of the United States, where President Bush has proposed a defense budget of $379 billion for the coming year.

Xiang's announcement reflected the rate of annual defense spending increases of recent years, which have hovered in the double-digit range since the mid-1990s. Particularly after the army was ordered in 1998 to give up its myriad commercial enterprises--a major source of its revenue--the Communist regime has been under pressure from the military brass to help make up the difference.

"A 17% to 18% increase is exactly what people expect," said James Mulvenon, an expert on the Chinese military at the Rand Corp. think tank.

Beijing's most recent five-year plan called for yearly defense spending increases of 15% to 20%, Mulvenon said. Last year's boost was 17.7%.

The government's biggest defense priority is to modernize what in many respects remains a backward military reliant on manpower rather than state-of-the-art weaponry, sophisticated tactics and new fronts for combat, such as Internet warfare.

In large part, the push stems from Beijing's awe and dismay over U.S. military successes abroad. Chinese generals were shocked by the superiority of U.S. troops and arms in the 1991 Persian Gulf War, then by the successful 1999 American-led campaign of airstrikes in Yugoslavia--which Beijing opposed--and, more recently, by the quick rout of the Taliban in Afghanistan.

Also, Washington's plans to develop a missile defense system and its decision to withdraw from the 1972 Antiballistic Missile Treaty have convinced many Chinese officials of the need to overhaul the army to counter U.S. prowess.

Although no one here believes that China can catch up to the United States any time soon, Beijing wants to become a regional power that other governments cannot afford to ignore militarily, especially over trouble spots such as Taiwan, the island Beijing claims as its own.

The army upgrade campaign also involves improving morale among the rank and file. Despite--or because of--their huge numbers, troops are often sloppily organized, poorly trained and underpaid--officers and recruits alike. Attracting career military personnel poses a challenge in a society boasting so many other options for making money.

One young former soldier said he received a monthly wage of just 100 yuan, or about $12, in addition to room and board during the first year of his three-year stint. His duties--as with thousands of soldiers across the country--were mainly to help build bridges and roads. He and his fellow grunts slept several to a room in large dormitories, which were locked each night after curfew. Having a girlfriend or a wife was prohibited.

For third-year recruits, he said, the monthly stipend could increase to 500 or 600 yuan if they signed contracts for further service, but he decided to bail out last year.

"There's no real career future there," said the former soldier, a 22-year-old from Shaanxi province who asked not to be identified.

Wednesday's announced budget increase is part of a larger boost in public spending across the board.

Xiang, the finance minister, unveiled an overall national budget of $169 billion, with a projected $37.5-billion deficit that is China's highest ever. Some economists warn that the shortfall could reach dangerous proportions, but the government insists that it is at a safe level.

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