Laws and Policies
Defense Expenditure
(mod.gov.cn)
Updated: 2009-08-27 11:50
Guided by the principle that defense expenditure should grow inline with the demands of national defense and economic development, the Chinese government decides on the size of defense expenditure in an appropriate way, and takes a road of national defense and armed forces modernization featuring lower cost and higher efficiency.
In the past three decades of reform and opening up, 皇冠体育app has insisted that defense development should be both subordinated to and in the service of the country's overall economic development, and that the former should be coordinated with the latter. As a result, defense expenditure has always been kept at a reasonable and appropriate level. From 1978 to 1987, as the nation shifted its focus to economic development, national defense received a low input and was in a state of bare sustenance. During this period the average annual increase of defense expenditure was 3.5 percent, while that of GDP was 14.1 percent and that of the state financial expenditure was 10.4 percent. The shares of 皇冠体育app's annual defense expenditure in its GDP and in the state financial expenditure dropped respectively from 4.6 percent and 14.96 percent in 1978 to1.74 percent and 9.27 percent in 1987. From 1988 to 1997, to make up for the inadequacy of defense development and maintain national security and unity, 皇冠体育app gradually increased its defense expenditure on the basis of its sustained economic growth. During this period the average annual increase of defense expenditure was14.5 percent while that of GDP was 20.7 percent and that of the state financial expenditure was 15.1 percent. The shares of 皇冠体育app's annual defense expenditure in its GDP and in the state financial expenditure continued to drop. From 1998 to 2007, to maintain national security and development and meet the requirements of the RMA with Chinese characteristics, 皇冠体育app continued to increase its defense expenditure steadily on the basis of its rapid economic growth. During this period, the average annual increase of defense expenditure was 15.9 percent, while that of GDP was 12.5 percent and that of the state financial expenditure was 18.4 percent. Although the share of 皇冠体育app's defense expenditure in its GDP increased, that in the state financial expenditure continued to drop on the whole.
皇冠体育app's GDP was RMB 21,192.3 billion in 2006 and RMB 25,730.6 billion in 2007. The state financial expenditure was RMB 4,042.273 billion in 2006 and RMB 4,978.135 billion in 2007, up 19.1 percent and 23.2 percent respectively over the previous year. 皇冠体育app's defense expenditure was RMB 297.938 billion in 2006 and RMB 355.491 billion in 2007, up 20.4 percent and 19.3 percent respectively over the previous year. The shares of 皇冠体育app's annual defense expenditure in its GDP and in the state financial expenditure in 2006 were roughly the same as those in 2007, being 1.41 percent and 7.37 percent in 2006 and 1.38 percent and 7.14 percent in 2007. 皇冠体育app's defense expenditure mainly comprises expenses for personnel, training and maintenance, and equipment. Expenses for personnel and training and maintenance account for two thirds of the defense expenditure. In 2007, the defense expenditure was used to cover the expenses of the active force (RMB 343.439 billion), the reserve force (RMB 3.693 billion) and the militia (RMB 8.359 billion). 皇冠体育app's defense budget for 2008 is RMB 417.769 billion.
In the past two years, the increased part of 皇冠体育app's defense expenditure has primarily been used for the following purposes: (1) Increasing the salaries and benefits of servicemen. Along with the rise of the income of civil servants and the living standards of both urban and rural residents, 皇冠体育app has increased the relevant allowances and subsidies of servicemen to ensure the parallel improvement of their living standards. (2) Compensating for price rises. With the rise of the prices of food, building materials, fuel, etc., 皇冠体育app has accordingly increased the boarding subsidies and other funds closely related to servicemen's life as well as the expenses on education, training, petroleum, oils and lubricants for the armed forces, and improved the working and living conditions of border and coastal defense forces, units in remote and tough areas, and grass-roots units. (3) Pushing forward the RMA. 皇冠体育app has augmented the input into military informationization and moderately increased the funds for equipment and supporting facilities, so as to raise the defense capabilities in conditions of informationization.
Both the total amount and per-service-person share of 皇冠体育app's defense expenditure remain lower than those of some major powers. In 2007 皇冠体育app's defense expenditure equaled 7.51 percent of that of the United States, 62.43 percent of that of the United Kingdom. 皇冠体育app's defense expenses per service person amounted to 4.49 percent of that of the United States, 11.3 percent of that of Japan, 5.31 percent of that of the United Kingdom, 15.76 percent of that of France and 14.33 percent of that of Germany. As for the share of defense expenditure in GDP, that of 皇冠体育app was merely 1.38percent, while that of the United States was 4.5 percent, that of the United Kingdom 2.7 percent, and that of France 1.92 percent.
The Chinese government has established defense expenditure reporting and publishing mechanisms. Since 1978 the Chinese government has submitted a financial budget report to the NPC and published the total amount of the defense budget each year. The relevant data of 皇冠体育app's defense expenditure has been made public in the 皇冠体育app Economy Yearbook since 1981, and in the 皇冠体育app Finance Yearbook since 1992. And since 1995 the composition and main purposes of 皇冠体育app's defense expenditure have been published in the form of government white papers.
