China sets another mild defence budget rise for 2021

BEIJING (Reuters) - China's 2021 defence spending will rise 6.8% from 2020, up just slightly from last year's budget increase and broadly tracking the government's modest growth forecast, as the world's second-largest economy emerges from the pandemic's fallout.

Premier Li Keqiang pledged that efforts to strengthen the People's Liberation Army, which is developing an array of weapons from stealthy fighters to aircraft carriers, would continue apace in the face of what China views as multiple security threats.

The spending figure, set at 1.35 trillion yuan ($208.47 billion) in the national budget released on Friday, is closely watched as a barometer of how aggressively the country will beef up its military.

Last year China said the defence budget would rise just 6.6%, its slowest rate in three decades, as the economy wilted in the face of the COVID-19 pandemic. This will be the sixth year in a row for a single-digit increase.

Li, in his state-of-the-nation address to the largely rubber-stamp legislature, said this year the government would strengthen the armed forces "through reform, science and technology and the training of capable personnel".

"We will boost military training and preparedness across the board, make overall plans for responding to security risks in all areas and for all situations, and enhance the military's strategic capacity to protect the sovereignty, security and development interests of our country," Li said in a government translation of his remarks.

"We will improve the layout of the defence-related science, technology and industry, and enhance the defence mobilisation system," he added, without giving details.

Li set an annual economic growth target of more than 6%, after last year dropping the gross domestic product growth target from the premier's work report for the first time since 2002 after the pandemic devastated its economy.

China routinely says that spending for defensive purposes is a comparatively low percentage of its GDP and that critics want to "contain" the country and demonize it as a threat to world peace.

The country is nervous about challenges on several fronts, ranging from Taiwan to U.S. missions in the disputed South China Sea near Chinese-occupied islands, an ongoing border dispute with India, and unrest in Hong Kong.

The budget gives only a raw figure for military expenditure, with no breakdown. Many diplomats and foreign experts believe the country under-reports the real number.

China's reported defence budget in 2021 is about a quarter of U.S. defence spending.

U.S. defence spending amounted to $714 billion in fiscal year 2020 and is expected to increase to $733 billion in the 2021 fiscal year.

China has long argued that it needs to close the gap with the United States. China, for example, has two aircraft carriers, compared with 11 in active service for the United States.

($1 = 6.4758 Chinese yuan renminbi)

(Reporting by Yew Lun Tian; Writing by Ben Blanchard; Editing by Shri Navaratnam and Gerry Doyle)

03/05/2021 3:50

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