January11, 2007: Normally secretive China recently released a report ("China's National Defense in 2006"), which provided more details on military matters than ever before. China said that it spent $35 billion on defense in 2005, and pointed out that this was 6.19 percent of what the U.S. spent, 52.95 percent of what Britain spent, 71.45 percent of France and 67.52 percent of Japan. However, no two nations calculate defense spending the same way. Many expenses are often charged to some non-military activity. Research on nuclear weapons and energy (used by the military), and many support items, for example. Thus the actual defense spending of China is believed to be somewhere between $50-60 billion. That's still a tenth of what the U.S. spends. However, that raises another issue, "purchasing power parity" (PPP). This is a concept that recognizes, and calculates the different costs, for the same things, in each country. Most people know this by the more familiar term, "cost of living adjustment." It's more expensive to live in New York City, than in Boise, Idaho. It's much less expensive to recruit, equip and maintain armed forces in China, than it is in the United States. Moreover, about half the Chinese troops are conscripts, who are paid very little, by any standard. Chinese troops, particularly the conscripts, live very simply, again, by any standard. The U.S. spends about 28 times more, per soldier, than does China. Thus to compare the U.S. and Chinese defense budgets, you have to adjust for the different costs. That brings the Chinese budget up to at least half of what the United States spends.

The Chinese reports makes a big deal about the strict controls they have on defense spending. That's an effort to hide the fact that corruption in the military is a major problem. It's been going on for decades, and only in the last decade has the government made serious efforts to clean it up. Some progress has been made, but according to stories that appear in the Chinese press (not to mention the scarier stuff that appears, unofficially, on the Internet), corruption is still a big problem. This relates to the defense budget only insofar as it means the Chinese get less for their money because of it.

There was not a lot of new information in the report. Most of the information has already been reported. But it was nice to see many things confirmed. For example, the Chinese armed forces have downsized by 1.7 million troops in the last twenty years, and now consist of 2.3 million active duty personnel. Also confirmed was a large reduction in the number of headquarters. The ratio of officers to troops was also improved, by a sharp reduction in the number of officers, and the growth of the number of professional NCOs. The report also confirmed that the military is trying to create a smaller (20 percent of the entire military) force of troops equipped with the most modern weapons, and allowed to train heavily. This is expensive, and makes it clear the Chinese realize they need some modern troops, but cannot afford to modernize the entire force.

China is also spending more money on food and accommodations for the troops. This is partly in recognition of the fact that the quality of civilian food and housing has grown enormously in the past two decades. It's a much greater shock, for new troops, when they encounter current living conditions in the Chinese military. Thus, if the Chinese want to keep able people in the military, they have to compete with the quality of civilian life. The report detailed many more ambitious improvements, things that will require a lot more money, and time. But it's clear that the Chinese are determined to have a modern military force. Eventually.