Key Points
1. The 2018 defence budget of China is $175 billion
(1.11 trillion Yuan), a rise by 8.1 percent from 2017.
2. As per ofcial Chinese media, this year’s defence
budget is about 1.3 percent of its gross domestic
product (GDP) (82.7 trillion Yuan), and is lower than
that of other major nations in terms of the percentage
of GDP.
3. China does not provide the breakdown of its
defence budget, leading neighbours and other
military powers to complain that Beijing’s lack
of transparency is adding to the regional tension.
The actual amount China spends on its military is
perceived to be much more and is widely debated.
4. India’sdefencebudgetfor2018–19isRs.2.95lakh
crore ($45 billion), at around 1.58 percent of the GDP
andisapproximatelyone-fourthofChina’sdefence
budget.Thisisinadequateforthecountry’sdefence
requirements. Further, the actual increase in the
DefenceCapitalexpenditureisjustaboutRs.13,000
crore from the previous year.
5. To address budgetary challenges, India needs to do
anebalancingactandtrytoreduceitsmanpower
cost. It is a well-known fact that a streamlined and
well-equipped military is better than a manpower-
intensive one that is mostly equipped with obsolete
equipment.
China’s Defence
Budget: An Analysis
and Comparison with
India’s Defence Budget
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oflandwarfare,includingconventionalandsub-conventionalconictandterrorism.CLAWSconductsresearchthatisfuturisticinoutlookand
policy-oriented in approach.
Website: www.claws.in Contact us: landwarfare@gmail.com
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CLAWS
June 2018No. 140
CENTRE FOR LAND WARFARE STUDIES
Introduction
The Chinese Premier (Prime Minister), Li
Keqiang, kicked off a potentially momentous
political summit in Beijing at the annual meeting
ofChina’sNationalPeople’sCongress.Speaking
in the Great Hall of the People, the cavernous
Mao-era building where China hosts its most
important political spectacles, Premier Li Keqiang
released the annual budget. Li Keqiang said as
he read a report to nearly 3000 delegates in the
Great Hall of the People on March 05, 2018, “We
will stick to the Chinese path in strengthening
our armed forces, advance all aspects of military
training and war preparedness”.
The Ministry of Finance proposed a budget
increase of 8.1 percent from the previous year,
pegging China’s 2018 budget at 1.107 trillion
Yuan ($174.6 billion). The 2018 gure is in line
with a recent trend that has seen a yearly increase
inChina’sdefencespendingfalltosingledigits.
Nonetheless, the 8.1 percent increase in 2018 does
represent a small jump from the last two years
when the defence budget grew by 7.6 percent in
2016 and 7 percent in 2017.
China’s budget announcement comes as
President Xi Jinping, the Commander-in-Chief of
thecountry’sarmedforces,focusesonincreasing
boththesophisticationandreachofthecountry’s
military.Theofcialmediajustiedtheincrease
Maj Gen P. K. Mallick, VSM (Retd) was a
Senior Directing Sta (SDS) at the National
Defence College, New Delhi. He is an ex-
pert in Cyberwarfare, SIGINT and Electron-
ic Warfare.
