‘China’s opaque military budgeting a concern for India’

China has almost shocked the international community by announcing its smallest increase in defence spending in over two decades. It can, however, not be ignored that the Red Dragon’s defence spending is by no means transparent. In 2008, China had budgeted its defence spending at USD 60 billion and increased it sharply to around USD 73 billion the following year. However China has proposed a mere 7.5 percent increase in its defence spending for the current year. The planned 7.5 percent increase follows at least 20 years of double-digit rise in the budget for the world`s largest standing military - People`s Liberation Army (PLA). According to Li Zhaoxing, spokesman for China`s Parliament, this year`s defence budget of CNY 532.11 billion (USD 77.9 billion) remained relatively low. China`s military spending is second only to that of the US, and is more than double India`s budget of USD 32.1 billion. In an exclusive interview with Kamna Arora of Zeenews.com, Jagannath P Panda, an expert on China’s affairs, discusses the reasons behind the slow expansion in China’s defence budget this year and its effect on India. Jagannath P Panda is an Associate Fellow at Institute for Defence Studies, New Delhi. Kamna: Why has China decided to boost defence spending by just 7.5 percent this year, the slowest pace of expansion in a decade? Panda: Right now, China is going through a rough patch internally. After the 2008 Tibet protests and the 2009 Urumqi crisis, China is on the back foot. It perhaps wants to consolidate its image a little right now. Added to this, after the financial crisis, China has cut its budget expenditure in almost all branches. However, it is still not a small figure compared to its total revenue and budget allocation. Kamna: Can the actual spending be higher than official budget? Panda: There is no doubt that the actual spending will be much higher. The world is well aware of the fact that China`s military expenditure and budget allocation are not at all transparent. Beijing doesn`t give the details of its budget expenditure in areas like military research and development, arms imports, budget spending for People`s Armed Police etc. So, definitely, China will spend more than what actually it states. Kamna: Should India be concerned about this budget? Panda: It is natural to be concerned about this opaque Chinese military budget and about its bearings. India, as a neighbour, has more concerns in security terms than any other country in the region. China`s purchase of advanced military equipment from Russia and some other advanced military powers is a matter of concern for India. Kamna: Will a decrease in defence spending positively add to China’s claim of ‘peaceful rise’? Panda: Not necessarily. The `peaceful rise` theory of China is a much more complex entity. It contains both passive and active elements of China`s state building approach and foreign policy expansion, whereas the decrease in defence spending doesn`t mean that China`s military advancement and strategy remain passive and without a purpose. Kamna: Can the Chinese figures be interpreted as a political statement, since the international community has long debated that the official budget for the PLA hugely understates real expenditure? Panda: To some extent yes. It is a political statement. Moreover, China wants to become more transparent in its system. At the same time, it will be a challenge for China to build a `responsive and responsible` power image. That may not be easy. Military budget and the intention of the PLA are some of the issues, which are bound to create suspicion among the neighbouring countries.