As strategic tensions in Asia intensify, China’s military spending has not only surpassed other regional powers in recent years but has “left them in the dust”, with Beijing’s defence outlays surging to five times Tokyo’s expenditures, according to a new report.

“China now dominates Asian military spending and is becoming the premier military power in Asia,” wrote Anthony Cordesman and Joseph Kendall in a paper for the Center for Strategic and International Studies, a Washington-based think-tank.

“This is partly driven by China’s perception of the potential threat from the US and other Asian powers, but is also driven by the fact that China can now afford such efforts, support them largely with its own technology base and cannot forget its recent past,” added Mr Cordesman and Mr Kendall.

The report’s findings come as China warned Japan this week that it is “playing with fire” by planning joint training patrols with the US in the contested South China Sea. China claims virtually the entire South China Sea and repeatedly denounces what it sees as interference there by the US, Japan and other countries.

“We must solemnly tell Japan this is a miscalculation. If Japan wants to have joint patrols or drills in waters under Chinese jurisdiction, this really is playing with fire,” Yang Yujun, China’s defence ministry spokesman, told a news briefing.

“China’s military will not sit idly by,” he added, without elaborating.

The growing heft of China’s military force imparts added importance to such warnings. Whereas in 2000, Japan’s defence spending was double that of China, China’s is now more than five times that of Japan (see chart), according to estimates by the Stockholm International Peace Research Institute quoted in the CSIS report.

“China’s spending and economic growth has become such that no Asian country will be able to compete for a long time,” wrote Mr Cordesman and Mr Kendall

In spite of rising tensions, several countries in the region have barely increased their spending on defence. In real dollars, Japan spends less now than it did in 1995 and Taiwan has only increased spending by $1bn since 2000, the report found.

In addition, the region is split diplomatically, with the 10-member Association of Southeast Asian Nations failing to come up with a joint statement mentioning the ruling of an international court this year that found China had “no legal basis” for some of its territorial claims in the sea. The opposition of countries such as Cambodia was key in thwarting mention of the ruling.

There is no doubt that the main motivation behind China’s military modernisation and spending is the strategic imperatives in the East and South China seas. An official Chinese white paper from 2015 made clear the country’s aim to transform itself into a “maritime power”.

“The traditional mentality that land outweighs sea must be abandoned, and great importance has to be attached to managing the seas and oceans and protecting maritime rights and interests,” the white paper said.

However, exact numbers on China’s military build-up are elusive because Beijing does not divulge the methodology behind its headline figures or give a detailed breakdown of the items included in its calculations.

Thus a range of estimates exist, with the US Department of Defence projecting figures that were much higher numbers than China’s official statistics but lower than those of SIPRI. The DoD puts total military-related spending in 2015 at $180bn while China announced a $141.5bn military budget (see chart).

Another approach to estimating China’s true levels of military spending is adopted by the International Institute for Strategic Studies, a think-tank. They estimate spending by purchasing power parity, which strips out distortions created by currency exchange rates, to come up with much higher numbers than the US DoD or SIPRI.

The IISS estimate of China’s defence spending calculated using PPP was $314bn in 2014, up from $277bn in 2013. However IISS’s estimate at current prices were $180bn in 2014 and $162bn in 2013.



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