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China Military Spending 40 To 70% Higher Than Officially Acknowledged: RAND

The report said military spending was likely to grow over the next decade because of the sheer heft of the Chinese economy, which is expected to triple in size over the next two decades even as growth rates subside.
Washington (AFP) May 19, 2005
China's military spending is 40 to 70 percent higher than it officially acknowledges, and is likely to exceed that of any US ally in two decades, a study by the RAND Corporation released Thursday has found.

The study estimated China's current annual defense spending at between 2.3 and 2.8 percent of its gross domestic product, or between 69 billion and 78 billion dollars in 2001 dollars.

That compares to US defense spending of nearly 430 billion dollars in 2004, which was 3.9 percent of GDP in 2004, it said.

"Chinas defense spending has more than doubled over the past six years, almost catching up with Great Britain and Japan," said Keith Crane, the lead author of the study, "Modernizing Chinas Military: Opportunities and Constraints."

"Although the rate of increase has slowed, by 2025 China will be spending more on defense than any of our allies," he said.

The study said Chinese defense industries have grown more efficient; benefited from access to foreign military systems and technologies; and improved the quality and sophistication of domestically produced military goods in areas such as information technology, shipbuilding and defense electronics.

RAND pointed out, however, that the study's estimates of Chinese military spending, although 40 to 70 percent higher than the official figures, were still considerably lower than other outside estimates.

The report said military spending was likely to grow over the next decade because of the sheer heft of the Chinese economy, which is expected to triple in size over the next two decades even as growth rates subside.

On the other hand, the government's ability to continue increasing military spending will be constrained by rising demand for social services, combined with rising government debt, the report said.

The study was conducted by RAND's Project Air Force, a federally funded research center that does research on subjects of interest to leaders of the US Air Force.

All rights reserved. � 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.

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