Reading time ( words)
China’s defence budget is expected to almost double by the close of this decade, according to new analysis released today by IHS Inc., the leading global source of critical information and insight.
China’s Defence Budget:
In 2010, China spent an estimated $134 billion on defence. By 2020, that figure is forecast to almost double to $260 billion. Across this decade, China is expected to spend almost $2 trillion on defence.
“We’re expecting annual growth in the Chinese defence budget to gradually slow over the coming years, but we should see increases average around 7 percent a year,” said Craig Caffrey, principal analyst, IHS Jane’s Defence Budgets. “The defence budget is expected to remain at around 1.7 percent of Gross Domestic Product, which is relatively conservative.”
In 2015, China’s defence budget was $190 billion, accounting for around 11 percent of global defence spending. Chinese defence spending is second only to that of the United States.
“By 2020, the centre of gravity of the global defence spending landscape is expected to have continued its gradual shift away from the developed economies of Western Europe and North America and towards emerging markets, particularly in Asia,” Caffrey said. “In terms of overall growth in each region between 2015 and 2020, Asia Pacific is expected to solidify its role as the key driver of growth in the defence sector.”
China’s Defence Imports:
China is now the third largest importer of defence equipment. “In 2014, China rose from fifth to third place, overtaking the UAE and Taiwan, in the global list of top defence spenders,” said Ben Moores, senior analyst at IHS Jane’s.
The IHS Global Defence Trade Report places Chinese imports at roughly $2.6 billion for 2014 or 4 percent of the world’s total defence imports. By way of comparison, in 2010, China imported $1.4 billion worth of defence equipment.
“China continues to require military aerospace assistance from Russia and its total defence procurement budget will continue to rise very quickly,” said Paul Burton, director of defence industry and budgets at IHS Jane’s.
About the IHS Global Defence Trade Report
The report was created using the IHS Aerospace, Defence & Security Markets Forecast database, a publicly sourced global forecasting tool that tracks current and future programs from the bottom up, looking at deliveries and funds released to industry rather than budgets. The study covers production, Research and Development, logistic support and service revenues where there is an export.