Author : C.Uday Bhaskar

China's official defence budget will cross the $100 billion mark this year as per a statement released Sunday in Beijing. This allocation marks an increase of 11.2 per cent over the last year to 670.27 billion yuan - which corresponds to $106 billion.

The annual increase has been relatively modest, given that over the last decade the increase has been closer to 20 percent, but this may have been impelled by the prevailing socio-political and fiscal challenges that even a robust economy like China has to contend with.

The trend lines are instructive and it may be recalled that in March 2008, Beijing had announced an official defence budget that corresponded to $57 billion, and now in 2012 - four years later - the figure at $106 billion has almost doubled.

Yet the PRC draws attention to the statistic that this figure is less than two percent of the country's GDP and that if the gross/absolute defence figure is climbing steadily - it is more due to the overall growth of the GDP.

If this trend is maintained, then it would be reasonable to expect that by 2016 - the PRC's official defence budget will be in the bandwidth of $220-250 billion.

The contrast with the U.S. - the current global 'gorilla' and the preeminent military power - is striking. The U.S. allocates upwards of half a trillion dollars for defence and with the additional costs incurred due to the two post 9/11 wars it is waging - this figure has been in the range of $700 billion and is between 3 to 4 percent of national GDP.

Clearly, China will take more than a decade to reach this fiscal peg - if current extrapolation about GDP growth rates and defence allocations stays valid.

The major military tussle over the next two years is likely to be between the U.S., Russia and China, with each dyad exuding different degrees of anxiety. With Vladimir Putin's return to the Kremlin on the cards - and a new leadership waiting in the wings to follow President Hu Jintao - it will be instructive to monitor the defence cooperation between Moscow and Beijing with special emphasis on the trans-border military capabilities that the Chinese PLA is seeking to acquire.

More by coincidence than design, India also announced its new army chief at the time that Beijing was unveiling its new defence allocation. Lt. General Bikram Singh, the Eastern Army Commander (Kolkata), will take over from the beleaguered Gen VK Singh, the current army chief who completes his tenure on May 31 - the date of birth controversy having been resolved by the highest court in a Solomon-like manner.

With the office of the army chief having been bruised in recent months, Lt. General Bikram Singh will have his hands full when he assumes office, with a range of issues that will need immediate and sustained attention - and none more critical than the modernisation of the Indian Army's inventory - which is budget related.

Four years ago India projected a defence budget for the financial year 2008-09 as Rs.105,600 crores - which at the time was about $26 billion. At the time China's was pegged at $57 billion - and that figure has now reached $106 billion.

India will announce its own defence expenditure in mid-March - and it is unlikely to cross the $50 billion mark. My own estimate is that it will be closer to the $40 billion threshold - or below Rs. 200,000 crores.

The GDP-fiscal logic which shapes the Indian defence allocation is self-evident. China's GDP is almost four times that of India's. But more than the asymmetry in funding, the PLA as an institution and national military preparedness has received single-minded policy attention from the Chinese ruling apex spanning the Mao-Hu continuum.

India is a telling contrast, where attention paid by the political spectrum on the military is episodic and emotional, rhetorical and reactive. Little wonder that the outgoing army chief has cautioned his Minister that the war-waging capability of the army has been "seriously degraded" - given the inordinately long delays in procurement decisions. Beijing and Rawalpindi would no doubt be studying this development very closely.

China's defence tab crossing the $100 billion mark is significant and the inherent opacity about China's public spending - especially for its military - raises questions about the credibility of the official figure.

Beijing's penchant for assertive muscle-flexing will cause some concern in the region and India is not alone in this regard. But political Delhi has to ensure that national security and husbanding the military machine are not sacrificed on the zero-sum anvil of arid domestic politics.

(Uday Bhaskar is a former director of the Institute for Defence Studies and Analyses (IDSA) and currently Senior Research Fellow at the National Maritime Foundation. He writes extensively on geopolitical issues in South Asia. The views expressed in the column are his own. This article first appeared in Reuters on March, 4, 2012.)
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