China Sees Dropping Defense Expenditure in Financial Spending: White Paper

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Last updated at: (Beijing Time) Monday, December 09, 2002

China Sees Dropping Defense Expenditure in Financial Spending: White Paper

The proportion of China's defense expenditure in the state financial spending dropped by almost 10 percentage points over the 1979-2001 period, says a white paper issued here Monday.

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The proportion of China's defense expenditure in the state financial spending dropped by almost 10 percentage points over the 1979-2001 period, says a white paper issued here Monday.

The proportion is on a declining curve from 17.37 percent in 1979 to 7.65 percent in 2001, says the white paper -- "China's National Defense in 2002", issued by the Information Office of theState Council.

Based on the continuous economic growth, China's defense expenditure has increased somewhat. The proportion of annual defense spending in the gross domestic product (GDP) was 1.09 percent in 1995, and 1.50 percent in 2001.

"However, China's defense expenditure has been kept at a fairlylow level," says the paper, adding that the increased part is basically of a compensatory nature.

China's defense spending was 144.204 billion yuan (17.42 billion US dollars) in 2001. The budget for defense expenditure in2002 is 169.444 billion yuan (20.47 billion US dollars), which is less than six percent of that of the United States and about half of that of Japan.

In 2001, according to the white paper, the percentage of defense expenditure in the GDP for the United States is 3.04 percent; Russia, 2.1 percent; Britain, 2.50 percent; France, 1.96 percent; and Germany, 1.10 percent.

As for the percentage of defense expenditure in financial expenditure the same year, it was 16.55 percent for the United States, 18.35 percent for Russia, 6.10 percent for Britain, 11.08 percent for France, and 9.80 percent for Germany.

"Compared with the USA, Russia, UK and France, the percentage of China's defense expenditure in its GDP and the state financial expenditure is also fairly low," says the paper.

The white paper says China's increased defense expenditure in recent years has primarily been for the increase of personnel expenses, establishment and gradual improvement of a social security system for servicemen, increase of expenses of a maintenance nature, increase of expenses spent on cooperation withthe international community in anti-terrorism activities, and appropriate increase of expenses for the improvement of military equipment to enhance defense capabilities under the conditions of modern technologies, particularly high technologies.

About two thirds of China's defense spending in the past three years went to cover expenses of personnel, maintenance and operations, according to the paper.

The past decade has witnessed the increase of the board expenses in the armed forces on five occasions, and an 84 percent salary raise for officers and 92 percent allowance raise for soldiers, says the paper.

Besides, China has established systems such as injury and deathinsurance for servicemen, medical insurance for demobilized servicemen and housing subsidies for servicemen, and adjusted and enhanced living expense standard for retirees from the military.

The Chinese government exercises a system of financial appropriation of defense funds, and has established a complete system of relevant laws and regulations for the management and supervision of defense spending, says the paper.

The National People's Congress, China's top legislature, reviews and approves the defense budget. The state and armed forces' auditing organs exercise strict auditing and supervision of the execution process of the budget.

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