Econintersect: China has announced its budget for 2013 and defense will get 10.7% more than in 2012. Corrected for inflation the real increase is 7.0%. China's 2013 defense budget is $116 billion. This compares to the U.S. spending more than four times that amount, $500 +/- billion, depending on how much of sequester is implemented, and near $600 +/- billion when overseas military operations are included. China will spend nearly 5.3% of its budget on defense; the U.S. spent just over 16% of its fiscal 2013 budget on defense.
The graph displayed is quite misleading. The red line shows real GDP growth while the defense spending growth is given in nominal terms. The nominal growth in 2011 was 15.7% and 2012 11.2%. The average annual real growth in those two years was 3.1%. This the inflation adjusted growth for 2013 (7.0%) is more than double what has been over recent years.
- China boosts defence spending by 10.7% (Kathrin Hille, Financial Times, 05 March 2013)
- China lowers 2013 inflation target to 3.5 pct (Xinhua, 05 March 2013)
- China budget stresses social well-being over growth; defense spending slightly lower (Japan Times, 05 March 2013)
- U.S. Defense Budget (February 2012)
- Budget of the United States Government, Fiscal Year 2013 (Office of Management of the Budget)