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UPDATE 4-China defence spending gets mild boost amid economic caution

Published 03/05/2021, 10:41 AM
Updated 03/06/2021, 06:40 AM
© Reuters.

© Reuters.

* China's 2021 defence spending to rise 6.8% year-on-year
* Sixth year in row of single digit increase
* Premier Li says to enhance capacity to protect country
* Defence spending widely believed to be under-reported

(Adds Pentagon comment, paragraphs 13-14)
By Yew Lun Tian
BEIJING, March 5 (Reuters) - China's 2021 defence spending
will rise 6.8% from 2020, up slightly from last year's increase
and broadly tracking the government's modest growth forecast, as
the world's second-largest economy emerges from the
repercussions of the coronavirus pandemic.
Premier Li Keqiang pledged that efforts to strengthen the
People's Liberation Army, which is developing an array of
weapons from stealthy fighters to aircraft carriers, would
continue apace in the face of what China views as multiple
security threats.
The spending figure, set at 1.35 trillion yuan ($208.47
billion) in the national budget released on Friday, is closely
watched as a barometer of how aggressively the country will beef
up its military.
Last year China said the defence budget would rise just
6.6%, its slowest rate in three decades, as the economy wilted
during the pandemic. This will be the sixth year in a row for a
single-digit increase.
Li, in his state-of-the-nation address to the largely
rubber-stamp legislature, said this year the government would
strengthen the armed forces "through reform, science and
technology and the training of capable personnel".
"We will boost military training and preparedness across the
board, make overall plans for responding to security risks in
all areas and for all situations, and enhance the military's
strategic capacity to protect the sovereignty, security and
development interests of our country," Li said in a government
translation of his remarks.
"We will improve the layout of the defence-related science,
technology and industry, and enhance the defence mobilisation
system," he added, without giving details.
Li set an annual economic growth target of more than 6%,
significantly below the consensus of analysts, who expect growth
could be more than 8% this year. China last year reduced the
target after COVID-19 damaged its economy. Yang Yujun, a former senior Chinese officer now at
Communication University of China, said it was a natural rate of
increase given the many problems facing the economy
post-pandemic.
"China is facing a relatively complicated international and
regional security situation, and the tasks of advancing the
military's modernisation, reform and building are also very
arduous. It is very necessary to ensure sufficient defence
expenditures," he added.
China is nervous about challenges on several fronts, ranging
from Taiwan to U.S. missions in the disputed South China Sea
near Chinese-occupied islands, a border dispute with India and
pro-democracy protests in Hong Kong.
The budget gives only a raw figure for military expenditure,
with no breakdown. Many diplomats and foreign experts believe
Beijing under-reports the real number.
In Washington, Pentagon spokesman John Kirby declined to
speculate about whether China was under-reporting its defence
budget.
"I'm in no position to judge right here today what we
believe about the veracity of the figure that they're putting
out there," Kirby told a news briefing.
China's reported defence budget in 2021 is about a quarter
of U.S. defence spending, which amounted to $714 billion in
fiscal year 2020 and is expected to increase to $733 billion in
the 2021 fiscal year.
China has long argued that it needs to close the gap with
the United States. China, for example, has two aircraft
carriers, compared with 11 in active service for the United
States.
China routinely says that spending for defensive purposes is
a comparatively low percentage of its GDP and that critics want
to demonize it as a threat to world peace.
Military spending accounts for around 1.3% of China's total
GDP, far lower than the United States, Hu Xijin, editor-in-chief
of the state-backed Global Times, tweeted.
"You will believe China is a peace-loving country as long as
you are not biased," he said.
($1 = 6.4758 Chinese yuan renminbi)

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