China's Stealthy Military Spending Surges to $710.6 Billion, Nearing US Defense Budget

China's actual defense spending in 2022 amounted to approximately $710.6 billion, nearly triple its officially reported budget of $229 billion, according to a new report by the American Enterprise Institute (AEI). This staggering figure brings China's expenditure close to the United States defense budget of $800 billion, raising concerns about the pace and scale of Beijing's military expansion.

Why this matters: As China's military spending approaches that of the US, it has significant implications for global security dynamics and the balance of power in the Asia-Pacific region. This development could lead to a shift in the regional and global order, with far-reaching consequences for international relations and global stability.

The AEI report, authored by Mackenzie Eaglen, breaks down China's defense spending into three main categories: equipment at $135 billion, training and maintenance at $121 billion, and personnel at a staggering $293 billion. Eaglen notes that the personnel costs are not publicly recorded by China but were estimated based on the lower labor costs in the country, where "soldiers are paid just one-sixteenth the wage of a US Army infantryman."

The report also includes estimates for other significant defense-related expenditures that China classifies as non-military. These include $45 billion for maintaining the People's Armed Police, a paramilitary organization, $45 billion for military pensions and demobilization, $2 billion for China's Coast Guard, and $21 billion for space forces. Eaglen points out that equal true, military, spending between the US and China plays to Beijing's advantage, as "the US defense budget is spread across various theaters worldwide, while China focuses on only one region."

The findings of the AEI report align with estimates cited by US lawmakers last year, which were based on US intelligence assessments. The significant discrepancy between China's stated military budget and these estimates has raised concerns about the implications for regional and global security dynamics. Eaglen states, "Considering that the Pentagon has labeled China the pacing challenge, this revelation should cause concern."

China's substantial true, military, spending comes as President Xi Jinping has committed to modernizing the People's Liberation Army (PLA) by 2027, focusing on mechanization, informatization, and intelligentization. The PLA's modernization efforts encompass a wide range of areas, including robotics, artificial intelligence, cyber capabilities, space technology, and information technology.

The AEI report highlights China's lack of transparency in its military spending, noting that expenditures on space forces, military satellites, and counter-space capabilities are not included in the country's publicly released defense budget. Additionally, China's military research and development spending remains a "black box," with no information published about specific investments in this area.

As global military spending reaches a record high of $2,440 billion in 2023, the true extent of China's defense expenditure and its far-reaching consequences cannot be ignored. Eaglen calls on the US to provide transparency about its findings on China's military spending power, emphasizing that"the American public is too often at ease in believing the US military remains ahead of all its competitors. "The world must come to terms with the implications of China's military rise and have a clear understanding of the scale and nature of this challenge."

Key Takeaways

• China's actual defense spending in 2022: $710.6 billion, nearly triple its reported budget.
• China's military spending approaches the US $800 billion, raising global security concerns.
• China's personnel costs: $293 billion, with soldiers paid 1/16th of US Army infantrymen.
• Lack of transparency in China's military spending, with "black box" areas like space forces and R&D.
• Global implications: shift in the balance of power increasing military spending in response.