October 1, 2019
Why China Can't Afford the Cost of an Arms Race with America
Beijing doesn't have the money.
by Salvatore Babones
China plans a 7 percent boost to military spending in 2017. Even that may be more than it can afford.
On Saturday, China announced a 2017 spending growth target of 7 percent in nominal yuan terms. That represents a real yuan increase of less than 5 percent. Or, assuming that the People’s Liberation Army buys its tanks wholesale, applying China’s current producer price inflation index of 6.9 percent leaves no growth at all.
In 2016, China’s official military spending rose 7.6 percent. Adjusted for inflation, that’s barely 5 percent. In U.S. dollar terms, it’s barely 3 percent. In real U.S. dollar terms, adjusted for inflation, it’s hardly any increase at all. Put simply, China’s defense spending is essentially flat.
https://nationalinterest.org/blog/buzz/why-china-cant-afford-cost-arms-race-america-84761
