China’s defense outlays may match those of the United States in 15 years. Meanwhile, America’s relative austerity paired with Russian aggression could force European military spending higher. Western makers of aircraft and other weaponry will face new global competition from Chinese companies, though revenue prospects may improve. Governments, meanwhile, may have to choose between just rearming and an all-out arms race.
Accurate data on Chinese military spending is tough to find, but the Stockholm International Peace Research Institute keeps an approximate tally by country. Adjusted for inflation, the PRC’s outlay was still dwarfed by the United States in 2013, accounting for less than one-third of the American total of $640 billion.
But the trends are moving in opposite directions. Over the past three years, spending cuts have been the norm in Washington, with the inflation-adjusted defense budget averaging a 5 percent annual decline. Over the same period, China has upped its investment by 8 percent annually. Assuming the United States follows the trajectory mapped out by the Congressional Budget Office through 2023 and keeps up with inflation thereafter while Beijing keeps boosting its spending at 8 percent a year, China will have the biggest military purse on the planet by 2029.
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