China's official defence spending to rise by 11.2% in 2012

BBC News - China military budget tops $100bn

Hey, isn't that the aircraft carrier the Russians sold as a floating casino?

I'm curious to see what the true Chinese spending on defence is, corrected for Purchasing Power Parity.

Having sourced some of my materials from China I know that often what they have for sale is usually around 1/10th the price of European/American suppliers, you get your quotes in 15 minutes and their customer services almost harass you for business once they have your contact details. I often have to chase European/American suppliers to provide me with quotes; a lot don't bother replying and those that do give you a quote in a week. By then the Chinese suppliers have stole their thunder with a cheaper, quicker quote.
Worlds second biggest economy has second biggest defence budget, this is somehow news.

'foreign experts have estimated that Beijing's actual military spending could be as much as double the official budget.'

That would still have it at only 28.68% of American spending on defence with with Chinese PPP being 75.11% of American PPP.
If you want a good analysis of PLA then I thoroughly recommend Dennis Blasko's The Chinese Army Today. It focusses mainly on ground forces but does look at the planning priorities, funding arrangements and doctrine as well as the usual kit-and-ORBAT analyses.

Basically, they pay out of the Army's budget a lot of things that in other nations are part of other government departments' expenditures. Their equivalent of MoD CS, for example, are uniformed civilians on the PLA payroll, even though they don't have any more of a military role than any other civvy. They also have: pensions; welfare; Military hospitals which function in a hearts-and-minds role in the poorer provinces; a far greater MACC/CIMIC role than our army does (disaster relief being a specific mission for the PLA and PAP); and a large propaganda apparatus of performing arts troupes (the singer Han Hong and those pretty girls in pink from the 60th anniversary parade being examples).

On the flip side, the defence industry is now largely separate from the PLA chain of command, with defence manufacturers having been spilt off and set up as private for-profit enterprises. Prices have risen as a result and they don't have the same extent of defence sales as most western nations to cross-subsidise indigenous use. The PLA had also, in the 80s and 90s, set up a load of businesses of purely civilian function to bring in revenue as a result of swingeing cuts to budget in the early Reform-and Opening period. It's being slowly weaned off these 'nice little earners', but some of the budget and expenditure still goes to wholly non-military efforts. One of the perennial rumours is that it was/is the biggest private landlord in Hong Kong.

The biggest priorities to funding at the moment are PLAN and PLAAF as the biggest users of big-ticket, high-technology assets. The ground force's spending priorities are better Ts&Cs for the grunts to support the move to an all-professional model; better training facilities; more realistic exercise conditions (inc. things like SAWES); and a more effective logistics chain. It surprised me (although it shouldn't) that two of the biggest block purchases of kit in the 90s weren't tanks or missiles but forklift trucks and barcoding systems. They're also laying a lot of railway lines and hardened oil pipelines to get fuel to the places they plan to conduct their main defensive battles in, should they be invaded.

All told, a very different set up.
Sustaining US Global Leadership

Project Power Despite Anti-Access/Area Denial Challenges. In order to credibly deter potential adversaries and to prevent them from achieving their objectives, the United States must maintain its ability to project power in areas in which our access and freedom to operate are challenged. In these areas, sophisticated adversaries will use asymmetric capabilities, to include electronic and cyber warfare, ballistic and cruise missiles, advanced air defenses, mining, and other methods, to complicate our operational calculus. States such as China and Iran will continue to pursue asymmetric means to counter our power projection capabilities, while the proliferation of sophisticated weapons and technology will extend to non-state actors as well. Accordingly, the U.S. military will invest as required to ensure its ability to operate effectively in anti-access and area denial (A2/AD) environments........

Provide a Stabilizing Presence. U.S. forces will conduct a sustainable pace of presence operations abroad, including rotational deployments and bilateral and multilateral training exercises. These activities reinforce deterrence, help to build the capacity and competence of U.S., allied, and partner forces for internal and external defense, strengthen alliance cohesion, and increase U.S. influence. A reduction in resources will require innovative and creative solutions to maintain our support for allied and partner interoperability and building partner capacity. However, with reduced resources, thoughtful choices will need to be made regarding the location and frequency of these operations......

Over the past ten years, the United States and its coalition allies and partners have learned hard lessons and applied new operational approaches in the counter terrorism, counterinsurgency, and security force assistance arenas, most often operating in uncontested sea and air environments. Accordingly, similar work needs to be done to ensure the United States, its allies, and partners are capable of operating in A2/AD, cyber, and other contested operating environments. To that end, the Department will both encourage a culture of change and be prudent with its ““seed corn,”” balancing reductions necessitated by resource pressures with the imperative to sustain key streams of innovation that may provide significant long-term payoffs.

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