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. Guessing game continues: How large is China's defense budget?
BEIJING (AFP) Oct 21, 2005
While everyone knows China is a rising power, they can only guess at how strong its armed forces are, or how much it is spending to build its military might.

The issue of the size of China's defense budget reemerged this week as US Defense Secretary Donald Rumsfeld visited Beijing.

He used every opportunity to voice concern over his host nation's military expansion, which he said was sending "mixed signals" about China's intentions.

"Many countries ... have questions about the pace and the scope of China's military expansion," he said at the Central Party School, speaking to future leaders of the Asian giant.

Defense Minister Cao Guangchuan denied that China has understated its defense spending and insisted that raising the living standards of the country's poor made it "impossible to massively increase" military expenditure.

According to the official Chinese state budget, defense spending this year will rise by 12.6 percent to about 30 billion dollars, maintaining the double digit expenditure seen over much of the last 15 years.

But most analysts believe this is an understatement, as the budget does not include new arms purchases and weapons research and development.

The Pentagon has provided one of the more bold estimates of China's real spending on the military, saying in its annual report on China in July that it may be up to three times larger than officially admitted.

That would make the People's Liberation Army the best-funded in Asia and number three worldwide after the United States and Russia.

The Pentagon report detailed China's efforts to increase its ballistic missile strength and modernize its conventional forces with acquisitions abroad of everything from advanced fighter jets to computerized information systems.

Few foreign observers dispute that China is camouflaging some of its defense spending -- as do many other countries.

"I really don't think this, on a practical level, is very significant, I don't think it's very unusual," said Paul Harris, an expert on China at Hong Kong's Lingnan University.

"Having said that, I do think it's in China's interest to be more transparent, because it has a mantra of rising peacefully to the benefit of everybody in the region, and if that's the case, then why hide things?"

China has repeatedly stressed any military buildup is for defensive purposes only, and foreign ministry spokesman Kong Quan insisted Thursday the United States had nothing to be concerned about.

"As we have already said many times, China's strengthening of its own defense ability is completely appropriate. There is nothing to be suspicious or worried about," he told a briefing.

Jon Sigurdson, a visiting research fellow at the East Asian Institute of the National University of Singapore, said China might not be disclosing important defense items out of a compulsion for secrecy.

"Maybe it's a question of how the budget is structured, rather than that they are trying to hide it," he said.

"Many of the national projects for microprocessors and other related technology have direct and very important significance for the military. But they're basically structured as civilian programs which in principle they are."

For instance, in the Japanese military budget many research and development items are not included, he said.

"You have a similar situation in many other countries. Not everything that's directly or indirectly related to the defense sector is actually included in the official figures," he said.

The United States itself is not including every conceivable military item in its defense budget, according to Harris.

"It's a little bit rich of Donald Rumsfeld to come and lecture the Chinese when the Americans do this kind of thing all the time, especially with regards to the intelligence budget," he said.

"It's only in recent years that we've been even given an overall figure for how much spending there is in the United States on intelligence, but we have no idea precisely where it goes."

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