China announces large hike in its defense budget

China has announced plans to increase its defense budget by 11.2% this year. The increase was announced earlier today by parliament spokesman, Li Zhaoxing.

This is the first defense budget Beijing has revealed since "President Barack Obama launched a policy 'pivot' to reinforce U.S. influence across the Asia-Pacific." The new budget will increase spending to 670 billion yuan, which is about $110 billion. The increase isn't as big last year's 12.7% increase, but it's still significant enough to provoke anxiety at a time where the US is shifting military resources to the Asia-Pacific. In a news conference, Li Zhaoxing tried to provide assurance that the budget increase would pose no threat to other countries. "You can see that we have 1.3 billion people with large land areas and a long coastline, but our outlays on defense are quite low compared to other major countries," Li said in the conference. Asian neighbors remain apprehensive about what Beijing's expanding military could mean for them, but US President Barack Obama continues to reassure them that the US will continue to play a key role in the region. The pentagon has also said it will "re-balance toward the Asia-Pacific region." Uday Bhaskar, a former director of India's institute for Defense Studies and Analysis in New Delhi, commented on the budget increase saying it's rather sizable. "It also, I would say, goes beyond the normal pegging we do for inflation, and it would be noted with great concern by China's principal interlocutors," he said.

In 2011, China announced a military budget increase of 12.7%, much larger than 2010's more modest increase of only 7.5%.

[url=http://www.reuters.com/article/2012/03/04/us-china-defence-idUSTRE82302O20120304 t=_blank]President Obama's proposed budget for the 2013 fiscal year calls for a Pentagon base budget of about $525.4 billion, about $51 billion less than the budget approved for 2012.