China will boost military spending by 14.9% this year despite the economic slowdown, continuing a run of double-digit increases that have unsettled the US and Asian neighbours.
The spokesman for the National People's Congress – China's rubber-stamp parliament, which begins its annual session tomorrow – told reporters it was a "modest" increase which would increase capabilities and improve conditions for the 2.3 million members of the world's largest army.
Li Zhaoxing said defence spending will reach 480.6bn yuan (£50bn), 62.5bn yuan more than 2008. But the rise is slightly below last year's 17.6% increase – and the total is still dwarfed by US military spending.
The Stockholm International Peace Research Institute (SIPRI) estimates that even when comparative buying power is considered, China spent the equivalent of $140bn (£99bn) in 2007, to America's $547bn. The UK spent the equivalent of $54bn.
SIPRI suggests defence spending in China has risen threefold in real terms over the last decade.
Chinese officials argue that heavy investment is needed to modernise its military after years of financial neglect and in the light of other countries' increasing capabilities and China's growing responsibilities. It has begun contributing to peacekeeping efforts and recently sent ships to join the taskforce battling Somalian pirates.
Li said the rise would mainly go towards raising wages and conditions, improving the military's hi-tech ability and enhancing its emergency response capabilities in "disaster relief, fighting terrorism, maintaining stability and other non-warfare military operations".
The former foreign minister added: "China's limited military strength is to protect national sovereignty and territorial integrity and would not threaten any country."
A Japanese foreign ministry deputy spokesman, Takeshi Akamatsu, said there were "untransparent points" in the defence budget. Last year a Pentagon report suggested China's true budget was two to three times the official figure.
But Li insisted: "There is no such thing as so-called hidden military expenditure in China."
Rory Medcalf, of the Lowy Institute for International Policy in Sydney, Australia, told Reuters: "It is a bit surprising that they have maintained this level of spending despite the global economic crisis. Fifteen per cent is certainly not modest.
"There certainly is a sense of concern in countries like India, Japan, Vietnam, and even Australia about a much more powerful China and what this is going to mean in the future."
US national intelligence director Dennis Blair said last month that China's military budget increases "pose a greater threat to Taiwan". Although relations have improved, Beijing has warned it would use force to prevent Taiwan moving from de facto to formal independence.
Teng Jianqun, a retired colonel and now deputy secretary general of the China Arms Control and Disarmament Association, told the Associated Press that spending should go down, but predicted that "the double-digit rate will remain for at least a few years".
China observers are also watching closely this week for details of the 4tn yuan stimulus package announced in November. It aims to boost domestic consumption in the face of slumping exports, largely through spending on public works.
A group of respected Communist elders has written to the leadership supporting the plan but warning that corrupt officials could squander the money.
"We are very concerned that privileged and corrupt individuals may use this opportunity to enrich themselves, damaging relations between the party and the people and exacerbating social conflicts," said the letter, obtained by Reuters, and signed by a former secretary to Mao Zedong and other liberal elders.
Yan Yiming, a prominent Shanghai lawyer, has also filed two government information disclosure requests demanding more details.
China's growth fell to a seven-year low of 6.8% in the fourth quarter of 2008 and analysts say the government will struggle to meet its 8% target this year even with the package.
Standard Chartered economist Stephen Green suggested this week could see an announcement of further investment. He said in a report that officials had told him as much as 8tn to 10tn yuan in investment over two years was "possible, if not likely".
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