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August 30, 2012

Asian collective military spending about to overtake Europe for the first time in modern history

The Economist magazine discusses military spending in Asia.

For the first time, in modern history at least, Asia's military spending is poised to overtake Europe's, according to the International Institute for Strategic Studies, a think-tank in London. China is doubling its defence budget every five years and India has just announced a 17% rise in spending this year, to about $40 billion.

Wikipedia has a list of countries by military expenditures

China          143 billion (2.0% of GDP, 8.2% of world total)
Japan           59 billion (1.0% of GDP)
India           46 billion  (2.5% of GDP)
South Korea     31 billion  (2.7% of GDP)
ASEAN           25 billion  (1.1% of GDP)

United Kingdom  63 billion (2.6% of GDP)
France          63 billion (2.3% of GDP)
Germany         47 billion (1.3% of GDP)
Italy           35 billion (1.6% of GDP)

United States spends 711 billion on defense (4.7% of GDP, 41% of world total.) The US military spending does not include the operational spending on the wars in Afghanistan and Iraq.

Europe's budgets are under pressure with the financial crisis. Asian economies continue to perform relatively better.

Europe still has superior actual military capabilities than Asia. Europe has had more spending than Asia for decades. Europe has more military gear and facilities that have been developed and purchased over decades. Europe has more trained personnel and those people have more actual combat experience.

In spite of having less than half of the annual military budget of China, the UK can project military power around the world while China only has semi-competent regional capabilities.




ASEAN

Military analysts at IHS Jane's say that South-East Asian countries together increased defence spending by 13.5% last year, to $24.5 billion. The figure is projected to rise to $40 billion by 2016. According to SIPRI, arms deliveries to Malaysia jumped eightfold in 2005-09, compared with the previous five years. Indonesia's spending grew by 84% in that period.

However, military spending for ASEAN is still just over 1.0% of GDP. ASEAN is forecasted to have GDP growth in the 5.0 to 6.0% range for a number of years. ASEAN should grow from about $2.3 trillion in nominal GDP now to about $10 trillion in 2030. The PPP GDP for ASEAN now is about $3.5 trillion. The ASEAN population is 600 million. The population level is comparable to the population of Europe.

There is a City UK GDP forecast out to 2015 for the ASEAN.



China and the USA

I have predicted that China will have about double the GDP of the United States on a nominal basis in 2030.


The Economist has a similar project that China will pass the USA in military spending sometime in the 2030s.

Economist - China is rapidly modernising its armed forces is not in doubt, though there is disagreement about what the true spending figure is. China’s defence budget has almost certainly experienced double digit growth for two decades. According to SIPRI, a research institute, annual defence spending rose from over $30 billion in 2000 to almost $120 billion in 2010. SIPRI usually adds about 50% to the official figure that China gives for its defence spending, because even basic military items such as research and development are kept off budget. Including those items would imply total military spending in 2012, based on the latest announcement from Beijing, will be around $160 billion. America still spends four-and-a-half times as much on defence, but on present trends China’s defence spending could overtake America’s after 2035.


In 2010, Nextbigfuture had a similar projection of China's future defense spending

Estimate of Defense Budgets for China and the USA in Billions

Nextbigfuture has also looked closely at China's procurement plans for major military systems

China's Military will be a Paper Dragon for 30 or more years

China’s defence industry may be improving but it remains scattered, inefficient and over-dependent on high-tech imports from Russia, which is happy to sell the same stuff to China’s local rivals, India and Vietnam. The PLA also has little recent combat experience. The last time it fought a real enemy was in the war against Vietnam in 1979, when it got a bloody nose. In contrast, a decade of conflict has honed American forces to a new pitch of professionalism. There must be some doubt that the PLA could put into practice the complex joint operations it is being increasingly called upon to perform.

General Yao says the gap between American and Chinese forces is “at least 30, maybe 50, years”. “China”, she says, “has no need to be a military peer of the US. But perhaps by the time we do become a peer competitor the leadership of both countries will have the wisdom to deal with the problem.” The global security of the next few decades will depend on her hope being realised.

This is only relative to the USA. China is and will be more than a match for any other regional power.

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