Defense budget expected to rise

▶Economic upturn, uneasy surroundings forecast a 7 percent growth: experts

Despite the impact of COVID-19 over the past year, many Chinese military analysts and observers believe that the country’s defense budget for 2021 will continue to increase, likely at a higher growth rate than 2020, and they name China’s positive economic growth, the tough military threats China is facing and China’s own rightful needs to develop national defense capacity as the main reasons.

Economists and fiscal experts expect China to taper spending at large in 2021 on a tightening budget though, after a record 3.6 percent budget deficit target for coronavirusinflicted 2020.

With the Chinese economy on track for a robust rebound this year, the normalization of

government deficit budgeting is in due course, the experts believe, citing much smaller burdens from the pandemic on government resources.

The normalization course is less likely to be a concern for China’s defense expenditure, which has come at a percentage of GDP lower than that of global military powers, especially factoring in the country’s ever-increasing economic size, they agree.

Faster-paced defense spending vs pruning budget deficit target

Multiple military experts reached by the Global Times a week prior to the expected release of the figure predicted a growth rate of around 7 percent.

In May last year, at a time when many from the outside world were uncertain about China’s financial situation after a huge blow dealt by COVID-19, the country still set its defense budget growth target at 6.6 percent, only slightly less than 2019’s 7.5 percent.

China is the only major country that maintained positive economic growth in 2020, and 2021 will be even better, so it will likely enjoy a small increase in its defense budget, Li Jie, a Beijing-based military expert, told the Global Times on Friday.

A growth rate of around 7 percent is likely, Li predicted.

The upward trend is set to coincide with a downward spiral in government deficit budgeting, however.

The country set a budget deficit target of at least 3.6 percent of GDP for 2020 when the economy was hammered by the coronavirus.

The record budget deficit target for 2020 was an emergency arrangement in response to the pandemic, which has run its course, and it’s time for the government to revise its budget deficit in accordance with normal economic needs, Lian Ping, head of Zhixin Investment Research Institute, told the Global Times on Friday.

It could be the case that the country will announce a budget deficit target of 2.5-3 percent for this year, as the government budget would go back to pre-virus levels, Ye Qing, a professor of Zhongnan University of Economics and Law in Wuhan, told the Global Times on Friday.

While anti-virus spending was top of the agenda last year, this year’s budget deficit is expected to focus more on rural vitalization, he projected.

Healthcare and medical expenses, among other categories of fiscal spending to support people’s livelihoods, are also forecast to remain prioritized this year.

That doesn’t mean the country will revise down its defense spending, Ye noted, citing continued commitments to aircraft carriers, among wide-ranging spending to shore up China’s military strength.

That the country’s military spending remains not on par with global military powers, especially considering China’s ever-expanding economy, is considered to have made the case for the country to up the ante in defense-related expenditures.

China faced high military tensions over the past year, and China is also modernizing its military, which all need funds, said Song Zhongping, a Chinese military expert and TV commentator.