China plans to raise spending on national defense by 21.8 billion yuan (about US$2.6 billion) in 2004, or an 11.6 percent rise over last year, Finance Minister Jin Renqing announced on March 6.

According to Luo Yuan, a senior strategist with the Chinese Academy of Military Sciences, in recent years all countries in the world have expanded their military budgets drastically. For most countries, actual military spending has hit a post-Cold War peak.

Luo said that in the past couple of years the world has witnessed an annual average of 10.7 local wars, coupled with increasing non-traditional security-threatening factors such as terrorist activities. Confronted with new menaces to world and regional peace, all countries have revised their views on security and steadily raised military spending.

Meanwhile, all?big powers in the world are straining to prepare for a new revolution in military affairs, which will change the focus of army building from a people-intensive to a capital-intensive one, and will inevitably require an increase in spending.

Sources say that the US defense budget for fiscal year 2004 is US$401.7 billion; adding US$87 billion cost of the wars in Iraq and Afghanistan, the total reaches US$488 billion, an all-time high. Japan is second only to the United States with an approximate defense budget of US$42.2 billion for fiscal year 2004.

A source with a British institute points out that in 2000, in as many as 20 countries the average proportion of military expenditure to national GDP hit 2.3 percent, and the figure may rise higher this year.

Despite its steady increases in defense spending over the past few years, compared with developed countries China's military expenditure -- viewed either as an absolute value or as a proportion of GDP -- should not surprise anyone, said Luo.

Luo Yuan states that there are five reasons for China to increase defense spending in 2004.

First, to support peaceful national development. Peaceful development requires that the country have the ability to contain a war, which in turn requires stronger strategic capability -- and thus more capital input -- than winning a war. Peaceful development also means that China's advances are mainly based on independence and innovation, not vying for strategic resources with other countries. This also requires greater spending.

Second, to defend national sovereignty and territorial integrity. The mission entrusted by the state to the armed forces is to defend national safety and unity and to provide a guarantee for the comprehensive building of a prosperous society. This makes it necessary to increase defense expenditure and raise the armed forces' self-defense operational capability in high-tech conditions.

Third, to meet the world's new military revolutionary challenge. The new military revolution makes clear that the trend in military development has changed from human-intensive to technology-intensive, which means capital-intensive. In the United States for example, a stealth bomber costs about US$500 million and a nuclear-powered aircraft carrier about US$4 billion. Without the necessary capital input, it would be impossible to promote the new military revolution.

Fourth, to develop in a Chinese-style leapfrog way. It is a well-known fact that the Chinese army has made substantial sacrifices for the nation's economic construction over a fairly long period. The result is an unfinished mechanized army meeting the challenge of being digitized. To avoid a huge "generation gap" between domestic and foreign military organizations, China must have its economic construction and national defense advance more or less in tandem, leapfrogging over each other.

Fifth, 200,000 troops will be demobilized. As other countries have seen, a large-scale demobilization costs money. Former soldiers need jobs and their families need to be settled; some military products and equipment require disposal. All these actions consume substantial funds up front, while the long-term efficiency of the move is not apparent until later.

(China.org.cn March 9, 2004)