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China's Latest Military Spending Increase Garners Anxious Reactions

Tuesday, March 13, 2007

The main debate at this year's National People's Congress in Beijing centered on the balance between socialism and capitalism, what Premier Wen Jiabao called the "two unswervinglies." The communist country's first private property law, a new tax code for businesses, and increased social spending for rural regions were debated contentiously in the Great Hall of the People -- at least by the standards of China's highest legislative body -- as well as in the state-controlled press. Less controversial amongst the 3,000 delegates and Chinese press was a significant increase in military spending. However, this announcement caused the greatest anxiety outside of the mainland.

This is the 19th year of double-digit growth in Chinese military spending, but this year's 17.8 percent increase garnered attention because it is the largest in five years. Beijing will officially spend 350.92 billion yuan ($45.32 billion) on its military in 2007, though most observers believe the actual spending will be at least twice the stated amount when other defense expenses are included in the budget. For example, China does not include major weapons purchases and military research and development expenditures in the defense budget. When these purchases are included, most estimates put China's defense budget just north of $100 billion, though that's still a fraction of the $481 billion Pentagon budget for fiscal 2008. ...

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