Date: 02-18-12 06:17
Will China really double its military budget by 2015?
It has been reported by an article in the Wall Street Journal that according to IHS Jane’s China’s military budget will reach some $238 billion by 2015. I don’t know if China will actually double its military budget by 2015. But I would certainly applaud the Chinese government if it did. China’s announced military budget for 2011 was some $91.5 billion or 601 billion yuan (At the exchange rate of 6.57 yuan per dollar in March of 2011 when the budget was announced. But at the current exchange rate of 6.3 yuan per dollar this is some $95.4 billion). This is only around 1.27% of 47.2 trillion yuan of 2011 GDP. Comparing this to American military budget which is some 4% to 6% of America’s GDP one would realize that it is actually minuscule and wholly inadequate to safeguard China in the face of increasing invasion of Chinese sovereign territories all around its extensive borders and waters.
It is also estimated by IHS Jane’s that China’s military budget for 2011 was actually higher at $119.8 billion. I don’t know what yuan amount this dollar amount was based on. At 6.57 yuan per dollar it would be 783 billion yuan but at 6.3 yuan per dollar it is only 755 billion yuan. If China’s economy grows at 8% per year for the next 4 years then it will reach some 65 trillion yuan by 2015. 1.5 trillion yuan would be some 2.3% of 65 trillion yuan. This is still a very small percentage of the GDP. How much this amount is in dollars depends entirely on the exchange rate then prevailing. If the exchange rate remains at 6.3 yuan per dollar then 1.5 trillion yuan will be $238 billion which is the amount of Chinese military budget estimated by IHS Jane’s for 2015. But if China raised the value of the yuan by 1.3 yuan per dollar to 5 yuan per dollar then the same 1.5 trillion yuan would be worth $300 billion or close to half of America’s military budget at some $600 billion. So how much China’s military budget will be in terms of dollars is uncertain because of the uncertain exchange rate then prevailing and since Jane’s cannot predict what the exchange rate will be, it is futile for it to predict the dollar amount of China’s 2015 military budget. But I would hope that it would be some 3% of the GDP in terms of yuan. Therefore, if China’s GDP reaches 65 trillion yuan in 2015 then I hope its military budget for 2015 will be some 2 trillion yuan. And at 5 yuan per dollar this would then be some $400 billion.
Since China’s military technologies have advanced almost to the same level of the US and it no longer needs to import any foreign products for its arms and materiel, it is much more accurate to use the yuan amount to estimate the kind of arms China can deploy. For example, it has been estimated that each J-10 costs less than 200 million yuan to make. Therefore, it will cost some 20 billion yuan to deploy 100 J-10. If China increased it military budget by 200 billion yuan a year and increased its allocation to the air force by 80 billion yuan per year, then by spending some 40 billion yuan China can deploy more than 200 J-10 a year. And if on the average the other 4th and 5th generation fighters cost some 200 million yuan each, then China can deploy some 200 4th and 5th generation fighters. And if with increased production and continuing advancement in technologies the economies of scale can reduce the cost to 100 million yuan per 4th and 5th generation fighter, then the number of 4th and 5th generation fighters can be increased by some 400 per year per year. This means that by 2015 China could have deployed some 2,000 to 4,000 more advanced fighters.
If some 30 billion yuan a year can be used to deploy more missiles of all types then assuming each DF-21D costs 20 million yuan then 200 of them will cost only 4 billion yuan. And if each DF-31A ICBM costs 50 million yuan then 200 of them will cost only 10 billion yuan. And if cruise missiles cost some 10 million yuan each then China can deploy some 1,600 of them per year. So by 2015 China could add some 2,000 DF-21D, 2,000 DF-31A, and tens of thousands of cruise missiles of all types.
And China could also use some 40 billon yuan to build more war ships of all kinds such as nuclear attack subs, nuclear missile subs, aircraft carriers, etc. For example, if each nuclear attack sub cost some 10 billion yuan, then it could easily build 10 by 2015 by increasing the number produced by 1 each year. That is, it can produce 1 nuclear attack sub in 2013, 2 in 2014, etc. And by 2020 China could easily have deployed some 55 nuclear attack subs or near parity with the US who has some 60 nuclear attack subs.
And if it increases its military budget by some 200 billion a year then it can increase the number of planes, ships, tanks, etc. build every year. This means that it is perfectly easy for China to equal the arms of America by 2020. And if China’s economy reaches 100 trillion yuan in 2020 and it spends some 2.5% of GDP for military it can spend 2.5 trillion yuan per year. And if the exchange rate is some 4 yuan per dollar then China’s 2020 military budget would be some $600 billion or more. That would be about the same as the American military budget.
Once China achieved some 3,000 advanced fighters and 100 nuclear attack subs it is safe from attack by all China’s enemies combined. And with 10 or more aircraft carriers China can easily help any of its allies anywhere in the world. This would be a significant milestone is China’s resurgence. Of course, China’s military would not stop here. China’s economy will ultimately achieve some 300 trillion yuan and some $100 trillion on an exchange rate of 3 yuan per dollar (2011 PP) by 2040. At which time, China’s economy will be some 5 to 6 times bigger than America’s economy depending on America’s population and its technological advancement. Therefore, China can easily afford 2% of GDP or some 6 trillion yuan and $2 trillion for its military budget (2011 PP). This would be some 2 to 3 times bigger than the American military budget and bigger than all the rest of the world combined. China could deploy 10,000 advanced fighters, hundreds of nuclear attack subs and dozens of aircraft carriers to overwhelm the rest of the world. Of course, China is a peaceful nation with a history of peace and harmony. With its dominant military power it will use it for maintaining genuine peace so that the whole world can live in justice and prosperity.
The West and their allies are demonizing China to trick it into demilitarizing unilaterally. Once China is demilitarized it will be vulnerable again to attacks like in the last 200 years since the first opium war. Therefore, China needs not apologize for arming itself adequately to defeat all potential enemies. It must also be strong enough to defend its allies so that it can maintain its supplies of energy, minerals, foods, etc. from foreign countries as far away as Africa and America. If the West accuses China of being a threat, China should just ask them, “So what?” China had been and still is being threatened by the West and its allies. China’s sovereign territories are being invaded and occupied right now. The West is not helping China to gain justice but is in every way trying to help others attack China. Therefore, China must militarize as fast as possible and brush aside the demonizations of the West, Japan, India, and the toady allies. In the end, in the absence of justice in the world, China can only rely on its powerful military to safeguard its security. No apologies necessary. If the West felt threatened, then they just have to suck it up.