China has announced a 7.2 percent increase in its defense budget, raising it to US$249 billion this year, from US$232 billion last year.
For more than two decades before 2015, its defense budget rose by double-digit percentages annually. Crucially, the official defense budget increased 10-fold over the past two decades — from US$24.6 billion in 2004 to US$249 billion this year.
However, the official figures do not give the complete picture. China strategically conceals several defense-related expenses under non-military categories. The official budget does not include expenses on paramilitary forces, provincial military bases, cyberespionage/cognitive warfare, and dual-use infrastructures along the Line of Actual Control (LAC) and on artificial islands.
China’s space, satellite, technological weaponry development and nuclear programs are also excluded, as they are covered under scientific and meteorological budgets.
Given these exclusions, the Stockholm International Peace Research Institute and the International Institute for Strategic Studies estimate that China’s actual defense expenditure could be much more than it projects. Most experts say that China’s total spending on defense might be more than 50 percent higher, because several items are under other budgets.
China is rapidly advancing its capabilities in space, cyber, nuclear and high-tech weaponry. Its massive defense budget is primarily directed at modernizing its armed forces and strengthening its dominance across the domains of land, sea, air, nuclear, space and cyber. Its increase in its nuclear arsenal is concerning — it would have 700 nuclear warheads by 2027.
The increase in the defense budget reflects China’s geostrategic priorities. Its goals are to replace US dominance, prevent foreign support for Taiwan, establish its hegemony in Asia and assert control in territorial disputes with its neighbors, particularly in the areas it claims in the South and East China seas, and along the 3,488km LAC with India.
Taiwan and India are directly facing problems from China. While Beijing might avoid an outright war to annex Taiwan because of its limitations in conventional warfare against the US, it is likely to use cognitive warfare and threatening military maneuvers to compel it to accede to its demands for unification.
The increase in the defense budget has serious implications for India, given China’s history of border tensions along the LAC and its assessment that India is an obstacle to achieving its dominance in Asia.
Chinese People’s Liberation Army (PLA) troops are stationed in the region with no signs of de-escalation. The increased forays of the PLA Navy in the Indian Ocean have become noticeable. China has the world’s largest navy, with three aircraft carriers and a fourth under construction. China has already built a “string of pearls” around India. It uses influence operations in India’s neighborhood to encourage anti-India groups to create pressure on the nation. The increased defense budget would enable China to launch more aggressively anti-India activities.
India must remain vigilant and strengthen its defense preparedness to counter any potential provocations by the PLA. India also needs to design an effective plan to neutralize the adverse impact of China’s cognitive warfare, as it is likely to increase.
India must enhance its own defense budget for a credible deterrence against China and its vassal state Pakistan. China’s defense budget expansion intends to reshape global security dynamics in its interest. The world must prepare for heightened geopolitical tensions, economic coercion and an intensified arms race.
S.D. Pradhan is a former deputy national security adviser for the Indian government.
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