Associated Press

Shanghai, May 20:

China’s military spending far exceeds what it officially acknowledges but is far less than many experts believe — less than a fifth of what the US spends and on a par with other nuclear powers, a report funded by the US Air Force said today. The report, by the think tank Rand Corp, said that in terms of purchasing power, China’s People’s Liberation Army — which includes the country’s naval and air forces — spends between $69 billion and $78 billion a year, estimated in 2001 US dollars — well below some estimates by the US government and some outside experts. Actual spending ranges between 2.3 percent and 2.8 percent of China’s gross domestic product, the study found. That compares with the $430 billion spent by the United States on defence in 2004, or 3.9 percent of US GDP.

The 2.5 million-strong PLA has received double-digit increases to its official budget in most recent years as China has stepped up efforts to upgrade outdated weapons technology and improve training. By 2025, the purchasing power of the Chinese military could reach $185 billion, estimated in 2001 dollars, said the report, which was funded by the US Air Force.

“China’s defence spending has more than doubled over the past six years, almost catching up with Great Britain and Japan,” Keith Crane, a senior economist at Rand and lead author of the study, said in a statement that accompanied the report’s release. “Although the rate of increase has slowed, by 2025 China will be spending more on defence than any of our allies,” Crane said. The authors of the report said their estimates included, in addition to the official military budget, items such as foreign weapons purchases, spending on paramilitary forces such as the People’s Armed Police, nuclear weapons, subsidies to defence industrie and defence research.