China's Military Budget Grows to Fullfill Policy Aims

China's imposition of an Air Defense Identification Zone (Adiz) over the East China Sea sparked protests across the region. The Adiz—defined by a set of rules that require any air traffic in the area to identify itself and comply with Chinese instructions—is not a hostile act in itself, but raises tensions between China and Japan, and consequently with the United States.

China's confidence arises from its growing power. Despite fears of a slowdown, the Chinese government has been projecting a 7.6% economic growth rate for 2013, slightly above the official goal of 7.5%. This should allow for another year of military spending growth in the 10% range, resulting in a 2014 estimated budget of about $126 billion. But according to U.S. Department of Defense adjusted estimates, China's military spending for 2014 could rise to $174-$259 billion.

China claims the spending increases are driven by the rising costs of personnel, logistics improvements and training. But larger budgets are also funding an aggressive modernization program, enabling China's People's Liberation Army (PLA) to exercise greater power regionally, building toward global military power status by the 2020s.

New PLA commander and Chinese Communist Party (CCP) Secretary General Xi Jinping has benefited from a career-long association with the PLA. He made numerous high-profile unit visits in 2013, helping both to build his support for the PLA and assert his authority over it. Xi is likely to spend much of 2014 doing the same, as control of the PLA remains central to the continuation of CCP rule.

China is now making more use of the PLA to enforce maritime territorial claims in the East China Sea, first around the Senkaku/Diayoutai Islands and then in the Spratly Island group in the South China Sea. In 2014, China is likely to increase its aggressive use of its newly consolidated coast guard to challenge Japanese coast guard ships around the Senkakus.

Despite China's improving economic relations with Taiwan, Beijing has made clear in words, and by the continued buildup of PLA forces in the Taiwan theater, that Taiwan's political status will not remain “unresolved,” as Washington describes it. For several years, Taiwanese military sources have told Aviation Week that the main threat has evolved from blockade to invasion. A September 2013 report from the Taiwan defense ministry asserted that by 2020, the PLA may be able to defeat external forces attempting to intervene against a PLA attack on Taiwan.

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