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Significant Chinese China defence budget 2010 spending reduction provides smallest growth rate UK.

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While China’s Premier Wen Jiabao announced that the government is targeting an economic growth rate of 9 per cent in 2009, despite a still fragile recovery process in response to the global financial crisis, China recently issued its draft defence budget for 2010. As only little details of the budget are released to the public, the growth rate is considered the most important and meaningful number. With a planned 7.5 per cent rate 2010 will be the first year in almost two decades not to see a double-digit increase in the defence budget. According to the draft, the 2010 defence budget will amount to CNY532.1 billion ($77.9 billion, €57.28 billion), increasing by CNY37.12 billion compared to 2009, according to NPC spokesman Li Zhaoxing. Defence expenditures account for 6.3 percent of China's total budget, Li said at the annual parliamentary session. The draft, which has been submitted to the National People's Congress (NPC) on Thursday, states that these funds will be used mainly to modernise the People's Liberation Army (PLA). While Li claims an increase of transparency on the budget issue and assures that the new budget will help “face multi-faceted military threats and improve capabilities for diverse military tasks,” according to RIA Novosti, experts believe that the official data considerably understates real expenditure. “Chinese officials have often explained in the past that the high rates of defense budget growth were due to strong inflationary pressures. But the past year’s inflation rate has been near zero. If inflation picks up again this year, this would make a return to a double-digit defense budget increase much more likely next year,” Tai explains. According to official Chinese data, the PLA currently numbers 2.3 million active personnel deployed in seven military regions and more than 20 military districts, with over 800,000 reserves. This makes the PLA the world's largest standing military force. Nevertheless, China repeatedly emphasises the defensive nature of its Armed Forces and the adequate level of military spending in relation to its GDP (1.4 per cent according to official figures). On the occasion of the draft budget submission, Li Zhaoxing said that China spends less money for its armed forces than other countries, such as the US, and explains: “The only purpose of China's limited military strength is to safeguard China's sovereignty and territorial integrity.”As only little details of the budget are released to the public, the growth rate is considered the most important and meaningful number. With a planned 7.5 per cent rate 2010 will be the first year in almost two decades not to see a double-digit increase in the Chinese defence budget.

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