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Earlier this week, on the occasion of the opening of the National People’s Congress, China announced that its defense budget would increase by 7.2 percent in 2023. The official Chinese figure of 1.55 trillion RMB, or about $240 billion, signals the second consecutive year that Beijing’s defense budget rose by more than 7 percent; it increased by 7.1 percent. from 2021 to 2022. Moreover, it marks the 28th consecutive year of increases in Chinese defense spending.
The official Chinese figure does not incorporate a number of major spending categories that are counted in American defense budgets. China does not include all elements of its ever-expanding space program. Nor does it include all research and development costs, foreign weapons procurement — notably from Russia — or defense mobilization funds. Neither does it include bonuses for college students or provincial base operating costs.
The International Institute for Strategic Studies (IISS) attempts to account for many of the categories that do not appear in the official Chinese budget. It estimates that Beijing’s 2022 budget amounted to $242.4 billion; however, in terms of purchasing power parity (PPP), which compares economies based on differences in countries’ cost of living, the number rises to $360 billion. Thus, the recently announced increase for 2023 would constitute a total of nearly $260 billion, or just over $385 billion in PPP terms.
American spending on defense continues to dwarf Beijing’s budget. The Biden administration has announced a Department of Defense top line of $842 billion, more than double that of China. Yet, the United States does not field forces only to deter China; it also seeks to deter Russian aggression against NATO. Moreover, Secretary of Defense Lloyd Austin this week visited the Middle East to reassure America’s friends in the region that the United States would not abandon them.
