China and other Asian nations with substantial militaries have double their defense spending over the past decade, though future growth is contingent upon their economies, a new report says.
China, India, Japan, South Korea, and Taiwan spent $224 billion combined on defense in 2011, or nearly twice the amount in 2000 when comparing with constant U.S. dollars, according to a new report from the Center for Strategic and International Studies (CSIS), a non-partisan think-tank in Washington.
The increases in the defense budgets accelerated significantly around 2005, and each of the five countries except South Korea had higher growth rates between 2005 and 2011 than between 2000 and 2005, according to CSIS.
“These steeper growth trajectories in recent years might be a precursor for continued significant increases in defense spending, especially in light of large, high-profile investment decisions such as India’s Medium Multi-Role Combat Aircraft (MMRCA) selection, Japan’s F-35 order, or South Korea’s F-X-3 multi-role fighter competition,” the 50-page report says.
David Berteau, CSIS’s senior vice president and director of its International Security Program, said yesterday he does not see an arms race akin to the one during the Cold War.
“I don’t think we saw anything that puts it in the category of an arms race in particular,” Berteau said at an event to unveil the report, titled “Asia Defense Spending: 2000-2011.”
He noted that CSIS found the Asian nations did not invest much in military research and development, saying that shows “a recognition that this is much more spending for nation interests rather than competitive spending across national boundaries.”
Byron Callan, director of Capital Alpha Partners LLC in Washington, agrees the Asian countries are not in an arms race.
“Countries are modernizing their militaries and replacing 1960s-70s era equipment with new investments,” Callan said yesterday in a note to investors about the CSIS report.
Looking to the future, the five Asian nation’s future defense spending “will hinge primarily on political and economic circumstances,” the CSIS report says.
“Continued or even increasing tensions in the security and political landscape of the Asia-Pacific region would constitute a stimulus for further increases in defense spending,” it says. “However, security policy considerations only provide the motive for sustaining growth in defense spending. The key enabler will be the availability of financial resources.”
“Should the economic climate in the region continue to develop positively, many countries will have the means to respond to their security concerns by further increasing their defense budgets, possibly at an accelerated pace,” it adds. “On the other hand, if the future financial environment proves to be more austere, pressure on defense spending will also mount.”
According to CSIS, the more-recent increases in defense spending, from 2005 to 2011, that occurred in the Asian nations did not happen in the United States and Europe.
Defense spending in the United States grew by twice as much from 2000 to 2005–of 7.2 percent annually, on average–compared to growth from 2005 to 2011–of 3.6 percent. And in Europe, defense spending dropped from 2001 to 2005 at an average yearly rate of -1.4 percent, then declined at a faster rate, of -2.5 percent, between 2006 and 2011, according to CSIS.
The year 2005 was also when China assumed the role as the Asian nation that spends the most on defense, surpassing Japan, the report says.
“This comparatively rapid expansion in defense spending is also illustrated by China’s share of the group’s combined defense spending, which more than doubled from 19.9 percent in 2000 to 40.2 percent in 2011,” the report says. However, CSIS notes the data it used on the communist nation was from official Chinese defense budgets, and in reality China may be spending even more than stated on its military.
The report says China’s defense spending grew at an average annual rate of 13.4 percent from 2000 to 2011. That’s far more than South Korea (4.8 percent), India (3.6 percent), Japan (3.5 percent), and Taiwan (1.8 percent) over the decade.
The Pentagon’s new strategic guidance, released by President Barack Obama in January, calls for strengthening the U.S. presence in the Asia-Pacific region as it shrinks the size of conventional ground forces (Defense Daily, Jan. 6).
Berteau thinks that emphasis on Asia will continue if Obama wins a second term or if he is unseated by Republican challenger Mitt Romney next month.
That’s “because it’s being driven by the dynamics in the (Asian) region and the national-security interests of the United States,” Berteau said at CSIS ‘s Washington offices. “It’s not really a political question.”