China's Defense Budget Set to Double by 2020, IHS SaysEngineering360 News Desk | September 03, 2015
China’s defense budget will likely double by the close of the decade, according to analysis from IHS. In 2010, China spent an estimated $134 billion on defense. By 2020, that figure is expected to reach $260 billion. Over the decade, China is expected to spend almost $2 trillion on defense. The country is currently the third-largest importer of defense equipment. In 2014, China rose from fifth to third place, overtaking the UAE and Taiwan, in the global list of top defense spenders.
“We’re expecting annual growth in the Chinese defense budget to gradually slow over the coming years, but we should see increases average around 7% a year,” says Craig Caffrey, principal analyst, IHS Jane’s Defense Budgets. “The defense budget is expected to remain at around 1.7% of Gross Domestic Product, which is relatively conservative.”
In 2015, China’s defense budget was $190 billion, approximately 11% of global defense spending. Chinese defense spending is second only to that of the United States.
“By 2020, the center of gravity of the global defense spending landscape is expected to have continued its gradual shift away from the developed economies of Western Europe and North America and towards emerging markets, particularly in Asia,” Caffrey said. “In terms of overall growth in each region between 2015 and 2020, Asia Pacific is expected to solidify its role as the key driver of growth in the defense sector.”
“In 2014, China rose from fifth to third place, overtaking the UAE and Taiwan, in the global list of top defense spenders,” says Ben Moores, senior analyst at IHS Jane’s.
The IHS Global Defense Trade Report places Chinese imports at roughly $2.6 billion for 2014 or 4% of the world’s total defense imports. In comparison, in 2010, China imported $1.4 billion worth of defense equipment.