China had an estimated $87.15 billion to spend on defense in 2004 -- more than three times the official government figure, according to a report released in London on Wednesday.
Experts at the International Institute for Strategic Studies, a military think tank, said that Beijing's official figures always underestimated real spending.
Their comments come as China continues to increase its military spending amid mounting U.S. concern. The official budget for 2006 went up by 14.7 percent to $35.3 billion.
China had an estimated $87.15 billion to spend on defense in 2004 -- more than three times the official government figure, according to a report released in London on Wednesday.
Experts at the International Institute for Strategic Studies, a military think tank, said that Beijing's official figures always underestimated real spending.
Their comments come as China continues to increase its military spending amid mounting U.S. concern. The official budget for 2006 went up by 14.7 percent to $35.3 billion.
The problems in estimating China's real level of spending are shown in this year's annual "Military Balance" publication.
For example, in 2004, Beijing claimed its official defense budget was $26.5 billion.
The official budget, however, omits items such as weapons purchased overseas and revenue from China's arms exports. It also does not include funds allocated to the police as well as research and development expenditure and subsidies to domestic defense companies.
When the IISS added these items, the overall figure came to $45.27 billion for 2004. Economists argue, however, that merely converting figures into dollars belies a country's real purchasing power, particularly for less developed nations. And using a complicated formula, they estimate China's real budget was more like $87.15 billion -- but they add that this figure should be treated with some caution. Using the similar approach, they estimated Beijing's spending in 2005 was around $104 billion.
Japan's official defense budget in 2006 was $41.1 billion, marginally lower than the previous year. South Korea increased its budget by 9.8 percent to $23.75 billion in 2006.
Meanwhile, this year's report was relatively upbeat about the security climate in East Asia despite the ongoing problem of North Korea's nuclear ambitions.
The IISS noted "a trend toward greater cooperation in defense-related activities among the countries of the region," citing joint naval exercises between Russia and Japan as examples.
The report also highlights Japan's growing role in the military field and expects an expanded role for the Self-Defense Forces under the new prime minister, Shinzo Abe.
Asked whether North Korea might carry out another underground nuclear test similar to the one performed in October, defense expert Mark Fitzpatrick told journalists this all depended on whether negotiations were proving useful for Pyongyang.
He added that it was unclear whether North Korea had passed data from the test on to Tehran. If, however, that was proved to be the case, "grave consequences" would ensue as U.S. President George W. Bush had already warned.
North Korea has refused to talk about denuclearization until U.S. financial sanctions are lifted and talks have taken place in Beijing to try and resolve the situation. The main six-party discussions on the nuclear program, which involve North and South Korea, the United States, Japan, Russia and China, are expected to resume next week.
