China to Boost Defense Funds by 12%

China announced Saturday that it would boost its defense budget by about 12%, an increase that Taiwanese officials immediately decried as an aggressive move but that some analysts said wasn’t enough to modernize the world’s largest army.

The announcement at the annual session of the National People’s Congress comes less than two weeks before Taiwan holds its presidential election and a controversial referendum that Beijing sees as a provocative step toward independence.

“Chinese military spending has been rising by double-digit figures since 1993, and we feel this has a negative influence on regional stability and peace,” Taiwanese Defense Ministry spokesman Huang Shuey-sheng said.

Beijing, which considers Taiwan part of China, downplayed the defense spending increase, saying it was part of a long-term strategy to improve a backward military.

“We will focus on developing new and high-technology weaponry and equipment, foster a new type of highly competent military personnel and promote modernization of our armed forces,” Premier Wen Jiabao said Friday during the opening session of the Chinese legislature.

Later in the day, however, China’s foreign minister once again trumpeted Beijing’s tough stance on the island, which China has said it is willing to take back by force if necessary.

“No one will be allowed to use any means to split Taiwan from the rest of China,” Foreign Minister Li Zhaoxing said at a news conference outside the legislative meetings. “The Taiwan question bears on China’s sovereignty and territorial integrity. To maintain national unity is the Chinese nation’s most important mission.”

Tensions with Taiwan aside, some analysts believe arms spending increases have not been enough. Two years ago, Beijing raised its defense spending by about 18%. This year, the focus of the new national budget has shifted to the neglected countryside and its growing income gap with urban areas. In line with that commitment, agricultural spending will rise by 20%.

“Our military budget is very low compared to other major countries of the world,” said Xia Yishan, a researcher at the China Institute of International Studies. This year’s total was not released, but last year China spent $22.4 billion on its military.

“Modernization is not just about upgrading equipment,” Xia said, “it should also be about improving the lives of our soldiers.”

In fact, much of the official budget would go to cover personnel costs of soldiers in the 2.5-million member People’s Liberation Army, many of whom are poorly trained and underpaid.

China’s actual military spending could be as much as two to five times the public figure, which does not include weapons purchases, research and development and other costs.

Beijing’s interest in modernizing its armed forces increases with each success by the U.S. military, from the Persian Gulf War in 1991 to the wars in Afghanistan and Iraq. China is keenly aware of its need to catch up, especially as it seeks to become a more formidable regional power.

“Looking at China’s security environment, they need to accelerate military spending. There’s long been a consensus on that. There’s nothing new or dramatic about the double-digit increase,” said Cheng Li, a China expert at Hamilton College in New York.