Measuring hard power: China’s economic growth and military capacity

Peter E. Robertson, Adrian Sin

Research output: Contribution to journalArticle

14 Citations (Scopus)

Abstract

China’s rapid economic growth is facilitating massive increases in its military spending and causing increased security concerns in Asia and the Western pacific. But there is uncertainty over how large China’s military spending is relative to other countries, or how fast it is growing in real terms. We address this issue by deriving a relative military cost (RMC) price index based on the relative unit costs of inputs. We find that China’s real military spending is much larger than suggested by exchange rate comparisons, and even larger than standard purchasing power parity comparisons. We also find, however, that the real growth of China’s military spending has been smaller than conventionally thought. This is due to rapidly growing wages in China and the large share of personnel in China’s military budget.
Original languageEnglish
Pages (from-to)91-111
Number of pages21
JournalDefence and Peace Economics
Volume28
Issue number1
DOIs
Publication statusPublished - 2 Jan 2017

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