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South China Morning Post
Thursday, December 27, 2001

Mainland to increase budget for the military
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 VIVIEN PIK-KWAN CHAN

China will increase military spending next year, it was reported yesterday.
Military spending would be "appropriately widened", the China-backed Wen Wei
Pao newspaper said, citing an authoritative source. It gave no figure.

China's military spending rose to 141 billion yuan (HK$133 billion) this
year, up 17.7 per cent from 121 billion yuan last year. In 1998, military
spending was 93.47 billion yuan.

The paper cited a defence expert as saying that since the military was
banned from engaging in commercial enterprises, it was necessary to maintain
spending to "keep all machinery functioning normally".

In addition, there was a need to raise the income of retired officers and
enlisted men, the report said.

Most international observers of the People's Liberation Army believe real
military spending in China is far more than officially declared figures. The
military budget does not include spending on foreign arms purchases, nuclear
weapons development, most military research or funding of local militias.

Despite China's repeated assurances to its Asian neighbours that it would
not seek to be a military power, Beijing sources said the mainland would
like the news to serve as a warning to the United States over its recent
decision to abandon the Anti-Ballistic Missile Treaty.

Beijing is worried the US withdrawal and the Bush administration's plan to
develop a missile-defence system will undercut the deterrent value of its
small nuclear arsenal.

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