At a time when China’s ambition for power projection has considerably increased, a double-digit growth in China’s defence budget promises to impact adversely the regional security dynamics. The growing asymmetry between the defence budgets of China and India is alarming, especially in view of the flawed relationship between Asia’s two rising powers.

In recent years, defence budget of no other country has been discussed, debated and speculated as widely as the defence budget of the People’s Republic of China. China’s official defence budget which stood at $14.6 billion (Rs. 65,700 crore) in 2000 has risen by well over 500 per cent to reach the staggering figure of $91.5 billion (Rs. 4,11,750 crore) in 2011. At the present rate of growth, China will cross over the psychological barrier of $100 billion (Rs. 4,50,000 crore) defence budget the next year. By contrast, India’s defence budget has grown meagerly by 129 per cent over the same period, from $15.9 billion (Rs. 71,550 crore) in 2000 to $36.6 billion in 2011. It is significant to mention here that China and India have both managed to achieve impressive GDP growth over the past decade, averaging 12.8 and 7.7 per cent respectively (IMF estimates). While China’s defence budget has grown consistently well over the country’s GDP average over the past two decades, India’s defence budget has hardly kept pace with the GDP growth. The growing asymmetry between the defence budgets of China and India is alarming, especially in view of the flawed relationship between Asia’s two rising powers.

China’s defence budget for 2011-12, announced on March 4, 2011, shows again a remarkable increase of 12.6 per cent over last year’s budget. Announcing the defence budget, Chinese spokesman Li Zhaoxing echoed Beijing’s previous assertions that the increase was justified, and China posed no threat to anyone. Li further stated that China’s defence spending is relatively low by world standards. however, Beijing’s stereotype defence of its defence budget does not cut much ice with the international community. It is widely accepted that China’s spiraling defence budgets go well beyond its claims that such level of spending is needed for territorial defence. Scaling new heights every year, China’s defence budgets, however, lead to cascading effects on defence expenditures by other countries, especially those countries which share adverse relationships with Beijing.

The burgeoning defence budget of China needs to be viewed not only in terms of increased capabilities but also from the perspective of Beijing’s recent assertiveness with regard to territories contested by China with her neighbours. Last year, China’s Defence Minister Liang Guanglie said the country was preparing for conflict “in every direction” and would use its rapidly growing economy and technological capabilities to speed up military modernisation. Countries lying at China’s periphery that are already facing heat from her recent assertiveness have a reason to feel concerned over the latest increase in China’s defence budget. Beijing is unlikely to keep its defence budget trimmed down for any considerable length of years, specifically in view of a number of modernisation programmes which are currently under way for China’s military.

The exponential growth of China’s defence budget over the past two decades is largely perceived as a red flag in a region which is fast gaining in notoriety due to increased muscle flexing by major powers with their eyes on the region’s vast natural resources, share of markets and key trading routes.

China, however, cannot escape the responsibility for fuelling militarisation in a region which is relatively low in terms of human development. The unwarranted growth of China’s military power (China faces no threats to her sovereignty, real or perceived) is however leading other countries, especially India, to take away much needed resources required for social spending on health, education and poverty-related programmes, etc, towards procurement of expensive weapon systems which cost billions in terms of foreign currency. Incidentally, China and India both figure in the medium category of countries listed on the human Development Index (UNDP 2010), and are ranked 69 and 119 respectively, in a list of 169 countries. China has allocated a staggering 22.5 per cent of its planned Central Government expenditure for 2011-12 on security alone which includes 10.7 for national defence and 11.5 per cent planned central expenditure for police, state security, armed civil militia, courts and jails. Incidentally, internal security budget is pegged higher than national defence in China’s latest budget.

It is, however, believed that official estimates of China’s defence budgets are generally fudged so as to avoid international censure, making the defence budgets appear more palatable to the Western audience. Lack of transparency in China’s defence budget has often led to speculative estimates, drawn up by different agencies. It is widely perceived that China’s official defence budget does not account for expenditures incurred by the second Artillery (nuclear forces), foreign acquisitions, military’s space programmes, asymmetric warfare, and research and development. Defence budget to GDP ratio at 1.4 per cent, as reiterated by the Chinese spokesman is again a gross understatement. The western estimates of China’s defence budget in terms of GDP ranges from three to five times the official estimates. By some estimates, China’s defence budget is already one quarter of the US defence budget and the gap is narrowing down further, especially with Washington mulling to reduce its defence budget over the next five years. however, it is the growing asymmetry between the defence budgets of China and India which has caused considerable concern in India’s strategic circles in recent years.