China's armed police are seen outside the Great Hall of the People. Beijing says its defense budget is 1.1 trillion yuan this year, but it tends to 'cook the books' when it comes to actual outlays. Photo: AFP

China’s national defense budget for 2018 will be over 1.1 trillion yuan (US$175 billion), up 8.1%, according to a filing by the Chinese Ministry of Finance.

This is the third year that the country has set a single-digit pace for its military expenditure growth, a spokesman of the National People’s Congress said, as China’s parliament commenced its week-long annual assembly on Monday.

A commentary in Xinhua, meanwhile, claimed that China’s defense spending vis-à-vis gross domestic product showed Beijing’s “magnanimity” in its dealings with other nations, plus its commitment to “non-hegemonic, peaceful development” and love of peace.

China’s 2017 defense budget – around 1 trillion yuan – was equivalent to 1.5% of its GDP. To put things in perspective, NATO has set a goal to boost military spending to 2% of GDP for its member countries. China also says it spends less on defense than other major powers on a “per capita basis”.

Still, China has long outspent Russia, India, France, Japan, Germany, among others, and was second only to the US on a 2016 list of military expenditure compiled by the Stockholm International Peace Research Institute.

Officially, the top three – US, China and Russia – spent $611 billion, $216 billion and $69 billion respectively on their militaries in 2016.

Source: Stockholm International Peace Research Institute

Growth in China’s defense spending has allegedly slowed over the past five years, after rising 10.7% in 2013, 12.2% in 2014, 10.1% in 2015 and 7.6% in 2016.

In a separate op-ed, the Global Times noted that the rate at which defense spending rises is determined by the security situation that China faces domestically and internationally.

It’s believed that the People’s Liberation Army will continue to spend the bulk of its outlay on procuring state-of-the-art missiles, submarines and stealth fighters, while phasing out aging and obsolete weaponry.

China tends to “cook the books” when it comes to money spent on research and development. It also camouflages military expenditure as outlays on infrastructure or industrial investment, among other things.

Beijing’s frenetic reclamation and island building in the South China Sea have long been questioned, but the trillions of yuan splurged in the vast yet disputed waters to fortify reefs and atolls have never appeared in the national accounts for defense.

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