Leadership: The Asian Arms Race


July 10, 2008: For the first time since the early 1960s, India's defense spending has fallen to less than two percent of national GDP. But that's mainly because GDP has been growing at such a rapid clip for the last decade. Twenty years ago, India spent about 3.3 percent of GDP on defense.

China, whose economy has been growing even faster (9-10 percent a year) for three decades, has official defense spending that is about 1.5 percent of GDP. But real Chinese defense spending is believed to be two to three times that. Communist states have, for a long time, hidden many military expenses in the civilian side of the government budget.

Both China and India are building up to something of an Asian arms race, with Chinese encroachment into the Indian Ocean seen, by India, as justification for trying to keep up. China's defense spending is believed to be $50-100 billion a year. India is spending 30-40 percent of that. India and China are devoting a lot of their additional spending to just bringing their troops up to date. Both nations have lots of gear that was new in the 1960s and 1970s. They don't expect to be as up-to-date as the U.S., which spends over $500 million a year, but there's plenty of newer, much better, and often quite inexpensive stuff to be had.


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