[Correspondent Diary] Key Points to Watch Closely at the China Lianghui, 'Defense Budget'

Ahead of the 100th Anniversary of the Founding of the People's Liberation Army in 2027, Emphasis on 'Military Modernization'
China's Defense Spending at 1.2% of GDP... Half the Global Average of 2.6%

[Asia Economy Beijing=Special Correspondent Jo Young-shin] China's largest political event, the Two Sessions (National People's Congress and Chinese People's Political Consultative Conference), will open on the 4th of next month. The Chinese People's Political Consultative Conference (CPPCC) will begin on the 4th, followed by the National People's Congress (NPC) on the 5th.

The biggest focus of this year's Two Sessions is, as always, the Chinese economy. The whole world is paying close attention to whether the Chinese economy, which was shaken by the COVID-19 pandemic, will fully normalize. This is especially true since this year marks the first year of the 14th Five-Year Plan (2021?2025).

Another aspect to watch closely is the change in China's leadership. Since President Xi Jinping's third term is legally possible, the prevailing expectation is that personnel changes in the Chinese leadership will be made to enable Xi's long-term rule. Xi's second term ends in 2022.

One more area to carefully observe at this year's Two Sessions is China's defense budget. Overshadowed by the economy and leadership changes, the scale of China's defense spending has fallen out of the spotlight.

[Image source=AP Yonhap News]

At last year's 5th Plenary Session of the 19th Central Committee of the Communist Party of China (19th CPC Central Committee 5th Plenum), the Chinese leadership presented a new vision to achieve "military modernization" by 2027. The year 2027 marks the 100th anniversary of the founding of the People's Liberation Army (PLA).

At the time of the 5th Plenum, Chinese media reported that the leadership created a military modernization roadmap by 2027 to safeguard sovereignty, territory, security, and development interests. This is interpreted as a move considering military tensions with the United States in the South China Sea and the Taiwan Strait.

The Chinese state-run Global Times forecasted that at this year's Two Sessions, the Chinese leadership will increase the defense budget by 7% compared to the previous year. Last year, China's defense budget was 1.2684 trillion yuan (approximately 220.46 trillion Korean won), marking only a 6.6% increase from the previous year.

The Global Times cited military experts who said that China's defense budget is low relative to the size of its economy. It pointed out that in 2019, China's defense budget was only about 1.2% of its gross domestic product (GDP), which is lower than that of the United States and India.

It also emphasized again that China's defense budget remains at 1.3% of GDP, which is only about half of the global average level of 2.6%.

Chinese military expert Song Zhongping said, "Over the past year, the United States has militarily pressured China by conducting military exercises near China's coastal areas and selling advanced weapons to Taiwan, and there have been clashes along the border with India. Since China faces external threats, it must increase investment in the People's Liberation Army to further enhance combat capabilities."

The Global Times also reported that the State-owned Assets Supervision and Administration Commission (SASAC) recently announced plans to expand investment in the defense and weapons industries.