China decides to hike defence budget by 7-8 percent in 2016. Impact on neighbourhood

As China’s economic woes continue to grow, it has not deterred the government from hiking its defence budget by 7-8 percent in 2016. This development could increase concerns among its neighbours whose military equipments are not as modernised as China or who do not possess the same might.

The announcement was made by Fu Ying, spokeswoman for the Fourth Session of the 12th National People’s Congress (NPC) at a press conference. The lowest hike in defence China last had was in 2010 when it was 7.5 percent. China’s economy grew below 7 percent for the first time in more than a quarter century. The economy was hit due to a property market downturn, falling trade and weak factory activity.

Impact on neighbourhood

China has land boundary disputes and maritime disputes with its neighbours. China has been working towards modernising its military to strengthen its position in the Asia-Pacific region. China has a land boundary dispute with India and has violated the international borders on many occasions and entered Indian territory. India, which has allocated a nominal amount for its defence expenditure in its budget this year has also been working towards modernising its military. India is the largest arms importer in the world. With China continuing allocating a sizeable budget for defence despite an economic slowdown, it is clear that China also plans to revive its economy by increasing its military prowess. This could also lead to an increase in arms race in the region.

The South China Sea which is a disputed area between China and other countries in the region, is likely to witness an increase in China’s naval prowess. China has been building military bases on disputed islands which has led to an escalation of geopolitical tensions in the region. China’s use of the disputed islands for setting up naval bases has earned condemnation from the international community.

A recent report by a Sweden based think tank showed Vietnam becoming a major importer of weapons in the region. This is due to China’s growing assertiveness in the region and Vietnam’s commercial interests in the disputed waters. China’s hike in defence budget allocation is likely to see other countries in the region increasing their defence budgets as well.

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