According to reports in the Japanese press, Chinese defense spending is 1.5 times higher than the official reported amount. The actual budget, reports claim, is $116.4 billion a year, or about one-sixth of the U.S. defense budget.

“China’s defense budget and spending is highly restricted and controlled, and there are no ‘so called’ hidden military expenditures as implied in the Japanese media,” a Ministry of National Defense official said.

Earlier, citing unnamed sources, Japanese reports had said that China’s military expenditures are expected to double to 1.41 trillion Yuan (208 billion dollars) in 2020 and triple to 2.30 trillion yuan (339.4 billion dollars) in 2030, bolstering the assertion that the country’s military expansion is likely to continue. (Link)

The estimates factor in a gradual reduction in China’s annual GDP growth, from 9% in 2010 to 4% in 2030.

Does this mean that in order to keep up, Japan, will have to bust the 1% GDP cap it maintains on defense spending? Not yet. The Soviet Union was, for its time, a much more capable threat than the Chinese currently are, and Japan was able to maintain the cap and provide a credible defense. Then again, 1% of GDP is not what it used to be, not after two decades of recession or minimal economic growth.

For now Japan may want to shift priorities in allocation of military resources. The nature of the threat has changed and Japan could shift priority away from ground forces to naval and air forces. Although the danger of an invasion of Japan evaporated nearly twenty years ago, in manpower terms, Japan’s army is more than three times larger than its navy.

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A contributor and editor at the blog War Is Boring, Kyle Mizokami started Japan Security Watch in 2010 to further understand Japan's defenses and security policy.
Kyle Mizokami has 596 post(s) on Japan Security Watch