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The Epoch Times March 04, 2006

Can China Sustain The Arms Race?

By Sonya Bryskine

The rapid military expansion of the People's Republic of China has set off alarm bells in some, and curiosity in others. With the annual increase in the official defence budget hitting double digits for the past decade, the question is: what are China's motives, but more importantly can it sustain this "arms race"?

Historical lessons

Lets take the USSR as an example. At the turning point of the Cold War in the mid-1980s, the Soviet Union devoted between 15 and 17 percent of its annual gross national product (GNP) 1 to military spending, according to United States government sources. The figure is astonishingly high for any country's economic sustainability.

The US at the time was only allocating an average of 6 percent of its GNP to defence, exhibiting a much lesser burden on its economy. Even during the Vietnam War, its military spending did not exceed 10 percent, according to Historical Tables, Budget of the United States Government, Fiscal Year 2005.

GlobalSecurity.org, a respected online resource of security information, places the 1988 military spending as a single line item in the Soviet state budget, totalling 21 billion rubles, or about US$33 billion. Given the size of the military establishment, however, the actual figure was at least ten times higher.

The challenges of establishing the real figures in the former communist giant are well known. The inherently secretive nature of the policies was the major loophole. Hence the billion-dollar military research programmes, as well as other spending, including training, military construction, and arms production, were concealed within the budgets of other ministries and state committees.

Even when Gorbachev's Perestroika was at its peak and USSR for the first time released military expenditure figures in 1989, the reality was well hidden behind the "Glasnost" facade. The miniscule $US77 billion "formally" spent on defence was nowhere near the real figures, estimated to be in the hundreds of billions.

The ideological concept of the "arms race" and the Cold War was close to fizzling out by the time President Bush Senior and Gorbachev met in Malta in 1989. The historic conversation, which took place just week before the collapse of the Berlin Wall, signalled that USSR was nearing a new era.

"One conclusion is obvious – the reliance on force, on military superiority and the arms race that stemmed from it, did not withstand the test…Cold War methods, methods of confrontation suffered a strategic defeat. We have come to this realization. And common people have realized this, perhaps even better" said Gorbachev. [from partial transcript of the meeting, published by CNNinteractive]

In analysing the route of the Soviet Union's collapse, experts often place the military expenditure burden as one of the major causes of its derailment. It was simply unable to economically sustain the "military machine", which on top of the standard defence components included vast nuclear and space programmes.

China's rapid military growth

Armed with this knowledge lets examine the current situation in China. Since the mid 90's it has been reporting official annual growth figures in its military budget of over 10 per cent. There is an on-going build up of missiles and war ships in the Taiwan straight, while the nuclear capabilities of the Chinese are yet to be fully evaluated.

The official budget figures

Every March, as part of its annual state budget, the Chinese release a single overall figure for national military expenditures. According to GlobalSecurity.org in 2000, the official budget figure was approximately $US14.6 billion. China increased its defence spending for the year by a staggering 17.7 percent.

In early 2001, China's publicly-acknowledged defence budget of over $US17 billion was higher than that of its neighbours - India, Taiwan, and South Korea, thus tipping the scale of regional balance. Beijing explained this increase as a response to "drastic changes" in the military situation around the world, a reference to the US-led military intervention in the Serbian-Kosovo conflict.

In 2002, China increased military spending by a further 17.6 percent, bringing the publicly reported total to $US20 billion. By 2006 the official figure had reached $US35.3 billion.

The estimated real budget

The "genuine" level of Chinese defence spending is hotly debated, and is certainly not known with any accuracy by the Chinese authorities themselves.

Most analysts estimate China's real spending on defence is at least three times as great as the publicly disclosed figure. For example, according to the Secretary of Defence's January 2001 report, Proliferation: Threat and Response, China's levels of military funding were expected to average $70 billion by 2004. When compared to the released figures of around $25 billion for the same year, the inconsistency becomes apparent.

China's defence spending is by no means transparent. This is hardly surprising, though, since the Chinese system is largely modelled on its Soviet prototype, with the same deceitful traits rusting through the military machine.

As with the Soviet military spending, the official Chinese defence budget apparently covers salaries, but does not cover the research, development and most importantly acquisition of new weapons and equipment. Those aspects are funded through the budgets of the responsible ministries. According to GlobalSecurity.org the official budget does not include the cost of the People's Armed Police, nor does it include soldiers' pensions. The official budget also excludes proceeds from international arms sales and from business operations owned by the military.

If China's military budget is indeed somewhere between $50 to $70 billion annually, it will make it the second largest defence spender in the world after the United States and the largest defence spender in Asia.

In comparison India, which is closest to China in terms of regional population, recorded a spending of only $US17.38 billion for the 2004-2005 year. This is given that it has also undergone an annual increase in its defence budget by over 10 per cent in the past decade. Besides, India has been involved in active military operations in Kashmir for decades, as well as in the 1999 Kargil war.

China's military expansion has certainly made the Pentagon uneasy. Furthermore, the fact that China has placed orders for 40 latest Russian fighter jets T-22, displayed at the controversial war games between the former communist rivals last August, has tipped the US to seriously question the military balance in the Asian region.

The Taiwan factor

Even if the official Chinese Communist Party (CCP) figures are one quarter of the monetary reality, the mere growth of the military capabilities of the Chinese at a time of its non-involvement in armed conflict pose a burning question: why is it pumping so much of its resources into its armed forces?

China's 2.5 million strong army is the largest in the world, overtaking both US and Indian defence forces. (US army numbers 1.6 and Indian 1.3 million respectively) Furthermore in recent years the world has nervously observed the continuing build up of forces aimed at Taiwan. China insists the island is part of its territory and has threatened the use of military power if it declares formal independence.

According to Deutche Press Agency (DPA) China currently has more than 700 missiles targeting the island. It also has 32 conventional and nuclear-powered submarines in or around the Taiwan Strait. The DPA report, citing the assessment office of the defence ministry, further estimates that by 2010 the number of ballistic and guided missiles deployed by China will exceed 1,800, while the number of submarines in the region will reach 50 by 2015.

Even more alarming are reports that Communist China's espionage networks have managed to obtain personal data on almost every single inhabitant of Taiwan, which includes files on military service records, vehicle and household registration, and national health data, according to the Taiwan news daily, The Taipei Times.

Espionage systems

It is well known that the spy networks of the CCP, stretch across continents. In the last year there have been increasing reports of both military and economic espionage targeting the US, Canada, Australia and some European countries.

In January a man, identified as Ko-Suen Moo of Taipei, was charged with being a covert Chinese agent, and working with a Frenchman to try to ship sophisticated high-tech military equipment from the United States to China.

Moo and Parisian Serge Voros have been indicted in Miami, Florida with attempting to export an F-16 aircraft engine, Black Hawk helicopter engines, cruise missiles, and air-to-air missiles to Beijing, according to a statement released by Immigration and Customs Enforcement authorities.

In fact, the well-known former Soviet "spy catcher" David Szady is currently mobilizing agents across the US to sniff out the extent of Chinese spy ring. Back in the 1980's Szadny studied every aspect of the Kremlin's mole network. His expertise is now focused on Beijing .

"China is the biggest (espionage) threat to the U.S. today," says Mr. Szady, now 61 years old and the FBI's top counterintelligence official, reported CNN.

Furthermore, in one of their biggest initiatives after the fight against terrorism, the FBI and Justice Department have sent hundreds of new counterintelligence agents into the bureau's 56 field offices, many to target Chinese regimes interests.

In hindsight China's military expansion of the last decade would not perhaps be so concerning, if only the Western states were not in the line of fire.

Last year in mid-July Chinese Major-General Zhu Chenghu stated that should the United States threaten China during a confrontation over Taiwan, the People's Republic would not hesitate to use nuclear weapons. "Americans will have to be prepared that hundreds... of cities will be destroyed by the Chinese," he said.

Such a frank statement, should raise a question in the minds of not just the US, but the rest of the democratic world: Is the Chinese Communist Regime a ticking Time bomb underneath its glamorous façade?