Friday, March 4, 2011

China to boost defence spending by 12.7 per cent

BEIJING, March 4, 2011

China will boost its defence spending by 12.7 percent this year, a legislative spokesman said on Friday, while reiterating that Beijing's return to double-digit military budget growth after a dip in 2010 is not a threat to other countries.

The increase to just over 601 billion yuan ($91.5 billion) would go toward hardware spending and salary increases for the 2.3 million members of the People's Liberation Army, spokesman Li Zhaoxing told a news conference in the Great Hall of the People, the seat of the legislature.

Chinese media reports say members of the PLA, the world's largest standing military, will receive raises of up to 40 per cent his year, their third pay increase in six years.

The announcement comes a day ahead of the opening of the National People's Congress, where the country's social and economic goals will be laid out for the next five years.

The increase is up from the 7.5 per cent forecast in 2010, which broke a string of years of double-digit growth as China transformed its military into a more modern force as its economy boomed to become the world's second largest. The rate of increase peaked at 17.8 per cent in 2007.

Mr. Li said the defence budget accounted for just 6 per cent of China's national budget and less than 2 per cent of its gross domestic product, a lower figure than in other countries.

"The government has always tried to limit military spending and it has set the defence spending at a reasonable level to ensure the balance between national defence and economic development," he said.

Mr. Li, a former Foreign Minister, said China's spending plans are transparent.

"This will not pose a threat to any country," he said.

Ni Lexiong, a defence expert at Shanghai University of Political Science and Law, said China needs to increase its defence spending in response to closer military cooperation between the U.S., Japan, South Korea and other countries in the region.

He said Beijing also needs to spend more on its military to deal with threats to its citizens and property overseas. Last month, Beijing took the unprecedented step of sending military transport planes and a navy missile frigate to help evacuate 32,000 Chinese from strife-torn Libya.

Mr. Li promised unspecified measures to tame inflation, which hit 4.9 per cent in January. He blamed price rises on a range of factors, including higher global commodity prices, speculation and media hype.

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