China hikes Defence Budget to $150 Billion, to step up Indian Ocean missions

The National People’s Congress will also approve China’s defence budget, which will cross $150 billion for the first time. Officials said this year’s budget would rise by about 7 per cent.

China’s annual government work report delivered by Premier Li Keqiang to Parliament on Sunday signalled a boost to China’s defence capabilities and singled out navy patrols on the high-seas for the first time as an operational priority, amid China’s expanding presence in the Indian Ocean.

Li’s annual work report to the opening session of the National People’s Congress also announced a lower 6.5 per cent GDP growth target for the coming year, besides listing key economic reforms with a focus on restructuring and a push to combat pollution, amid other policies. The GDP target was slightly less than last year’s 6.5-7 per cent figure, with growth in 2016 at 6.7 per cent.

The NPC will also approve China’s defence budget, which will cross $150 billion for the first time. Officials said this year’s budget would rise by about 7 per cent. While Sunday’s budget unusually did not mention the exact figure for the first time, Finance Ministry officials told the Associated Press the proposed figure was 1.044 trillion Yuan or $151 billion.

On Saturday, the NPC’s spokesperson said the budget would increase “by about 7 per cent”, which would take spending past 1 trillion Yuan for the first time. The budget last year was 954 billion Yuan or $146 billion at the then exchange rate.

“We will continue to deepen reforms in national defence and the armed forces,” Li told the Chinese Parliament in his annual address. “We will strengthen maritime and air defence as well as border control and ensure that important operations related to countering terrorism, safeguarding stability, international peacekeeping and providing escort in high seas are well organised.”

Analysts said much of the hike is likely to go to the PLA Navy as it expands its global footprint. Li’s specific invoking of “escort in high seas” underlined this perception, elevating it as an operational priority.

The work report in the past two years did not mention the navy’s high-sea escort missions, officials said. In 2014, the work report said “the armed forces must resolutely carry out their mission of providing disaster relief, countering terrorism, maintaining stability, keeping peace, providing escort and handling emergencies, and actively participate in and support economic development.”

Yin Zhuo, a rear admiral and a senior researcher at the PLA Navy Equipment Research Center, told the Party-run Global Times that “in order to protect China’s territories and overseas interests, China needs two carrier strike groups in the West Pacific Ocean and two in the Indian Ocean. So we need at least five to six aircraft carriers,” he said.

A separate budget report said the government will “support efforts to deepen the reform of national defense and the armed forces, with the aim of building a solid defense and strong armed forces that are commensurate with China’s international standing and are suited to our national security and development interests.”

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