On Tuesday 11 November 2008, Mr Mark Stoker (Defence Economist, IISS) addressed members and guests of the Institute on “‘Estimating China’s Defence Spending’”. Organised by IISS-Asia, the event took place at 9 Raffles Place, #53-02 Republic Plaza.
Synopsis:
The spectacular growth of China’s economy during the past decade has led to equally spectacular increases in the budget of the People’s Liberation Army. During the past 14 years, the official budget of the PLA has grown by more than 10 percent a year, climbing from RMB63bn (US$7.5bn) in 1995 to RMB417bn (US$61bn) in 2008. However, many non-Chinese analysts, not to mention Western politicians, suggest that the true figure is significantly higher than the official budget suggests and complain of a lack of transparency in PLA budgetary matters. In 2007, Beijing countered this accusation by submitting PLA budget data to the UN for publication in the annual ‘Reduction of Military Budgets’ but the published data simply mirrors that already made public in Chinese biennial publication ‘White Paper on China’s National Defence’. Whilst transparency has improved in recent years, there is still no simple yet effective methodology to ascertain the true extent of PLA funding. This has led the IISS to establish its own approach to the question, taking into account extra-budgetary spending and the problem of varying exchange rates.
Mr Stoker is Defence Economist at the International Institute for Strategic Studies and economic editor of The Military Balance. Previously, he worked for many years in the investment banking industry as an economist and analyst specialising in G7 capital markets. Since joining the IISS in 2000, he has revised the IISS methodology used to calculate defence spending in order to make international comparisons more meaningful, and has written regularly on macroeconomic developments and their impact on military spending and the effect of military R&D on military equipment quality.
[IISS-Asia is pleased to acknowledge the financial support of the Australian Department of Defence for this seminar series.]
