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China continues trend of sinking defense budget growth

05 March 2017

It came just days after President Trump pitched a 10 percent surge in United States military spending.

China's defence budget this year will rise by around 7 per cent over last year's US$147 billion (S$207 billion), a senior official has said, pointing out that increasing China's military capability would benefit peace and security in the region.

The precise figure will be provided by Premier Li Keqiang in his address to the National People's Congress on Sunday morning.

The increase in defence spending was announced by Fu Ying, the spokesperson of China's parliament, the National People's Congress (NPC), ahead of its annual meeting.

China's announcement of its military budget had been highly anticipated, as the country is involved in a territorial dispute in the South China Sea, where China claims an area contested by several other countries.

Lu believes that a four-pronged strategy - moderately prosperous society, all-around in-depth reform, promoting rule of law and strict CPC discipline that has been implemented under Xi leadership placed China as the world's second largest economy next to the United States.

China's military build-up has rattled nerves around the region, particularly because of Beijing's increasingly assertive stance in its territorial disputes in the East and South China Seas and over Taiwan.

"But in the meantime, we must also have the capability to defend our sovereignty, our rights and interests", she said. In contrast, even China's 7 per cent rise would only bring its military spending to about a quarter of that of the US.

Seeking a more streamlined fighting force, China plans to complete the cutting of 300,000 military personnel by the end of the year, shifting the emphasis away from the land forces and toward the navy, air and rocket units.

The new increase could be the country's slowest defense budget rise in at least a decade.

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A spokesperson for China's Ministry of Foreign Affairs this week downplayed Trump's vow to give the U.S. military a $54 billion boost, saying only that China hoped United States plans would benefit stability.

However the country's defence budget is still far smaller than that of the US.

Spokeswoman Fu dismissed concerns about China's military.

Chinese defence spending would stay at around 1.3 per cent of GDP, she added.

"Now the trend over the disputes is very clear, China and ASEAN (Association of Southeast Asian Nations) have returned to the track of consultation and negotiations and the situation in the South China Sea is calming down", Fu said. "American actions in the South China Sea have a definite significance in terms of which way the winds blow", she said, adding that the "gap in capabilities" with the U.S. is "enormous".

China has a long-term goal of "becoming a world-class military force, just like America, " he said.

Trump then publicly questioned USA support for the one-China policy, alongside constant criticism of China's currency tactics, threats to slap punitive tariffs on Chinese goods, and bluster over China's military build-up in the South China Sea - all of which are believed to have reinforced the concerns of the nation's top leaders who prize stability and predictability as top priorities.

"As to how to the situation develops in future, that depends on USA intentions".

"Whether the militaries will pose a threat to each another, we'll need to look at their strategic intentions", she added.

China continues trend of sinking defense budget growth