By Aritra Banerjee
China’s announcement of its draft military budget for 2023 has sparked the interest of countries worldwide. Being the Dragon’s neighbourhood geopolitical rival, India, too, is concerned. Both nations are vying for military dominance in Asia, and are locked in several territorial disputes. China’s proposed military budget is expected to have significant regional security and stability implications and will likely shape India’s defence strategy in the coming years. As tensions between the two nations continue to simmer, conflict watchers observe with bated breath to see how this military rivalry will unfold.
Beijing’s proposed military budget for 2023 is expected to reach a record $208 billion, a significant increase from the previous year. This figure is seen as being indicative of China’s economic power and sheds light on the country’s strategic intent and perception of potential threats. In contrast, India’s defence budget for the current fiscal year stands at $73.65 billion– a fraction of China’s proposed budget. Despite this discrepancy, India and China’s military rivalry remains one of the most intense and complex in the region. Both nations compete to control the Indian Ocean Region (IOR) and strategic border regions along the Line of Actual Control (LAC).
While comparing military budgets may seem straightforward, many analysts believe that China’s military needs and goals are far more complex and diverse than India’s, given China’s status as a global superpower. As such, comparing the two countries’ military spending must be done with care and nuance.
Decoding The Dragon’s Military Budget
China’s recent unveiling of its draft military budget for 2023 has raised questions and concerns regarding the accuracy of its spending figures. According to the Centre for Strategic and International Studies (CSIS), the numbers issued by the Chinese government are unreliable. The US Department of Defense (DoD) noted that China’s actual military spending may now be close to 1.1 to 2 times higher than stated in its official budget.
Despite the uncertainty surrounding China’s military spending figures, one thing is certain: the amount earmarked for defence is rising. China’s spending on defence went up by 6.6% in 2020, 6.8% in 2021, and 7.1% in 2022. The steady increase indicates the intent to ramp up military capabilities. The latest budget figure, which sees China’s defence spending rise to roughly $225 billion, indicates growing military concerns over several issues. This is 7.2% higher than the 2022 budget. It also marks the eighth consecutive year of increase in the nation’s military spending.
According to the Financial Times, China’s budgeted defence expenditure for 2023 is 5.7% of total government expenditure. This is the third annual increase in that share after over two decades years of continuous reductions. However, its spokesperson Wang Chao refutes claims that China’s increased defence spending threatens other countries.
The reason for China’s increased military spending is in part due to the various military challenges it faces. Apart from being locked in a contentious boundary dispute with India, there are several other territorial disputes in the IOR. China’s claim on Taiwan continues to be challenged by Western powers as being dubious. Furthermore, the US and other nations have bolstered naval and air missions in the disputed South China Sea (SCS). Japan has recently changed its post-second world war defence-only principle and is now stocking up advanced offensive weapons. The ambitions of President Xi Jinping, linked closely with his legacy, also factor in.
In 2023, the Peoples Liberation Army (PLA) is expected to commission more advanced warplanes. This includes J-20 stealth fighter jets and J-16 multirole fighter jets. They will replace the legacy J-7 fighter jets that are being decommissioned.
China is also expected to hold more realistic combat-oriented drills that consume large amounts of costly live munitions and fuels. The commissioning of China’s third aircraft carrier, speculated to happen this summer, the rapid production of new destroyers and fighter aircraft, and investments in space technology and artificial intelligence (AI) for missile targeting systems are likely to be the main areas of spending in 2023.
How Does India’s Defense Budget Stack Up Against China’s?
As highlighted, China’s defence spending is a formidable force in Asia, with a budget of $225 billion that outstrips India and the 13 next-largest military spenders in the Indo-Pacific region combined. Meanwhile, India’s budget allows an expenditure of up to spend $72.6 billion on its military in 2023-24. The contrast with China’s military expenditure is starkly visible.
Despite China’s formidable military presence, India has outpaced it regarding targeted economic growth. China’s growth in military spending at 7% outpaces targeted economic growth of around 5%, while India’s defence budget has been projected to increase by 13% more than the previous year, far more than the projected GDP growth of less than 7% in the next financial year.
However, India’s defence budget needs to be higher on capital expenditure. Only Rs 1.62 lakh crore of the total Rs 5.94 lakh crore has been allocated for capital expenditure, which means that buying new weapons, aircraft, and ships and creating military infrastructure will increase by just 7%.
India’s focus on indigenisation is evident in its budget, with nearly 75% of the defence capital funding earmarked for domestic firms. Additionally, New Delhi’s defence spending accounts for 13.18% of the total expenditure in budget 2023, while China’s number is 5.7%, indicating India’s strong intent to strengthen its military.
While China’s defence spending is significantly higher, it constitutes a more minor part of its GDP. India’s defence spending has been above 2% of GDP for many years, although it dipped slightly in budget 2023. China’s, on the other hand, has remained below that number.
Analysts feel India cannot match China in military spending, given the substantial current gap and the strength of the Chinese economy, which is expected to keep growing. However, spending with the proper emphasis can give India a more credible deterrence against China. India can improve its military capabilities and secure its borders by focusing on domestic firms and capital expenditure.
An analyst this Correspondent spoke to highlighted that tracking the allocation of funds for new equipment as opposed to other organisational costs such as those spent on human resources and the upkeep of forces is essential to consider when comparing the defence budgets of different militaries; furthermore, the operational context of the armed forces being compared is another aspect to factor in. To surmise, a clear distinction must be made between the funds allocated to run a military organisation versus money earmarked for the induction of new assets.