Estimating China's Defence Expenditure: Some Evidence From Chinese Sources

Abstract

Much attention has recently been paid to the difficult subject of estimating China's military expenditure (ME). This study seeks to contribute to this dialogue and research. Admittedly, this is not an easy task. A major problem with any analysis of China's ME is the veil of secrecy shrouding military allocations. Of course, the difficulty of gathering statistical data of sufficient reliability in this area is not peculiar to China. But Chinese leaders' traditional preoccupation with secrecy makes them extremely reluctant to publish details of the country's ME even in the crudest aggregated form. Until China published its first defence White Paper in November 1995, the annual state budget had contained only a single-line entry for defence. Even the White Paper did not reveal much about what was included in the official military budget. More important, a considerable amount of Chinese defence spending is not reflected in the official military budget. It is widely accepted by Western defence analysts, and occasionally admitted by their Chinese counterparts, that China's total defence spending includes three major components: