Going beyond the obvious

Our surfer speculates on China's defence budget, a big worry for India.

India and China announced their defence budgets almost together. While India's defence budget is up by mere 7.23 per cent, China's up by 15 per cent. China would be spending $ 35 billion on its defence in 2006-07.

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But these are just official figures and have no takers. There is a broad consensus among international think tanks and Sinologists that China is spending far more than shown in official figures.

What exactly is the Chinese defence budget? Unlike the United States and India where democratic process has led to a transparent budget administration including defence budget, China's defence finance system is under a 'veil of secrecy'.

The Chinese defence budget, therefore, is subject to wild estimates: often as high as twelve times. But most estimates limit China's actual expenses between two to three times the official figures. This would give a figure anywhere between $ 70 to 100 billion. There are ample reasons to consider such propositions.

First, unlike India, China's Peoples Liberation Army (PLA) does not get funds only from the central government. Under the informal 'three - thirds' principle, the central government, the provinces, and the local governments share the burden of PLA's upkeep and maintenance. While the central allocations are mentioned in the budget, those from the provinces and local governments do not figure officially.

However, given the huge size of the PLA (2.3 million), a considerable amount must be coming from them. Second, military research and development (R&D) also gets similar cross funding. Unlike India, where the annual defence budget includes military R&D, in case of China, substantial funding comes from Commission on Science, Technology and Industry for National Defence (COSTIND) and Ministry of Science and Technology. The General Armaments Department (GAD) contributes only a part of the military R&D budget.