China Further Lowers Defense Budget Growth to 6.6 Pct
(Source: Xinhua; issued May 22, 2020)
BEIJING --- China will continue to lower its defense budget growth rate to 6.6 percent in 2020, according to a draft budget report Friday.

The 2020 defense budget continues to see single-digit growth for a fifth consecutive year. It is the lowest growth rate in recent years.

This year's defense budget will be around 1.27 trillion yuan (about 179 billion U.S. dollars), according to the draft to be deliberated during the annual session of the National People's Congress (NPC) starting Friday.

China's total defense spending in 2019 only amounted to a quarter that of the United States, the world's largest defense spender, while the per capita expenditure was just about one-seventeenth.

Noting China has no "hidden military spending," Zhang Yesui, spokesperson for the third session of the 13th NPC, said that the country is transparent about its defense spending.

China's defense spending has been staying at around 1.3 percent of its gross domestic product for many years, well below the world's average of 2.6 percent, Zhang said at a press conference held ahead of the NPC's annual session.

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Breaking Down China’s 2020 Defense Budget (excerpt)
(Source: Center for Strategic and International Studies; issued May 22, 2020)
China kicked off the annual meeting of its legislature, the National People’s Congress (NPC), in Beijing on Friday, May 22. The first day of the NPC session featured the widely anticipated announcement of China’s new defense budget. Chinese officials revealed on Friday morning that spending on national defense in 2020 would rise to 1.268 trillion yuan, an increase of 6.6 percent—the lowest in decades.

Since 2016, year-over-year growth in China’s defense budget has ranged between 7.2 percent and 8.1 percent. While the announcement of a 6.6 percent increase in defense spending in 2020 marks a significant downtick, it must be understood in light of the recent slowing of the Chinese economy. For the first time since China began publishing GDP targets in 1990, Chinese leaders did not set economic growth rates for the economy this year, as a very low rate of growth is expected due to Covid-19. The IMF estimates that China’s GDP will grow by only 1.2 percent in 2020. By comparison, China’s GDP grew by 6.1 percent in 2019 and the military budget grew by 7.5 percent.

Looking at expected government expenditure provides additional clarity. While the central government budget is slated to fall by 0.2 percent, total national government spending (which includes the central government spending) will increase by 3.8 percent as leaders work to stimulate the economy. Spending on the military as a percent of the central government budget will rise slightly from 5.06 percent in 2019 to 5.12 percent in 2020, and spending as a percent of overall national government spending will rise from 33.6 percent to 36.2 percent. (end of excerpt)


Click here for the full story, on the CSIS website.

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