China's military budget for 2011 + Jasmine Revolution

As you guys probably have heard by now, China is planning to raise its military budget for 2011 by 12.7% (or 12.6% in other reports). You can see CNN's piece on it here. Now, I'm sure that there have been the usual alarming articles about China's rising military expenditures and the much higher real military expenditures, but I think that's often overstated. For example, I often read mention of arms import and other security forces like PAP not been included in the defense budget. However, China currently spends very little on arms import compared to the overall budget. In fact, the largest recent defense purchase are for 18 Ka-28/31 and a number of Mi-171 helicopters. Gone are the days where it spent billions on Kilo submarines and Su-30 fighter jets. On top of that, the budget allocation for PAP can be found on both the federal and provincial budget, so they are not as hidden as claimed by "experts". When one consider that the real inflation is China is running at probably 10%, a 12.7% hike is really not that much. And I think that when people spends too much time on the defense budget, they miss out on more important subjects like the following.

This WSJ piece is a far more interesting story in my opinion.

China projected bigger spending on internal security than on defense in 2011–after spending more last year too–as the government tightens physical and technological controls to quash calls for a “Jasmine Revolution” like the one shaking the Arab world.

On the first day of the annual meeting of China’s legislature, a Finance Ministry budget report showed that actual spending on law and order last year was 548.6 billion yuan ($83.5 billion), slightly more than what was budgeted for the year.

That compared with officially reported military expenditure of 533.5 billion yuan ($81.2 billion) in 2010.

The same report showed that spending this year on police, state security, armed civil militia, courts and jails would total 624.4 billion yuan ($95 billion), an increase of 13.8% over 2010.

China’s 2011 military budget, by comparison, is 601.1 billion ($91.5 billion), representing a rise of 12.7% over last year, a government spokesman announced Friday.

That means that China’s internal security spending is growing faster than its defense spending.

Actual spending on defense is probably far higher as the official budget omits key items such as arms imports, according to foreign analysts, but they say the same is also true of the public security budget, which does not include all covert surveillance for example.

The report did not detail what exactly the internal security budget would be spent on, but Premier Wen Jiabao suggested in his annual work report Saturday that some of it would be channelled towards Internet controls.

“We will strengthen and improve the system of public security,” he said. “We will improve the contingency response system, and enhance society’s capacity to manage crises and withstand risks. We will intensify our information security and secrecy, and improve management of information networks.”

The increase in the headline figure for law and order reflects Chinese leaders’ concerns about the potential for the kind of unrest which has racked the Middle East and North Africa over the last month, analysts say.

It is also likely to reinforce concerns among some Chinese scholars that China’s immense internal security apparatus is diverting funds away from welfare and other public services that might address the root causes of social unrest.

China’s security services are currently engaged in an intense and prolonged crackdown on dissent triggered by anonymous online calls for silent “strolling” protests in dozens of Chinese cities every Sunday. There have been few signs of actual protests since the appeals began circulating two weeks ago on Twitter and other sites which can only be seen in China by wealthier urbanites who use proxy servers or virtual private networks to circumvent web filters.

But China has responded with a massive show of force, detaining or confining to their homes dozens of political activists, and tightening Internet controls, especially on hugely popular Twitter-like micro-blogging sites.

Chinese police have also re-imposed some of the restrictions on foreign journalists that were lifted in the run-up to the Beijing Olympics in 2008, and warned them that they will have their visas revoked if they violate those restrictions.

Police summoned dozens of foreign reporters last week to video-recorded meetings in which many were told they were no longer permitted to go to the places where the protests were supposed to happen.

The Beijing Daily newspaper, which is the mouthpiece for the Communist Party in the capital, issued one of the loudest public warnings yet on Saturday against people taking part in anti-government protests.

“Everyone knows that stability is a blessing and chaos is a calamity,” it said in a commentary. “Those people intent on concocting and finding Middle East-style news in China will find their plans come to nothing.”

Now, I'm not sure exactly what China's internal spending really include. It could be including PAP or the civilian militia, but a large part of that is use to spy on its own citizens and keeping order around the country. If anything, I find the recent calls for Jasmine revolution to have raised far more anxiety from the Chinese political elite rather than the common folks. Unlike the middle eastern countries, the Chinese economy has done quite well in the past couple of years. People are reasonably satisfied with the government and willing to give up some freedom for stability and continued prosperity. However, with the inflation problem already here and a possible deceleration in the economy coming, we could reach a point where a large portion of the population become dissatisfied. If there is one thing that the Chinese political and the wealthy elite are fearful of, it would be a gathering of all of the people who have lost out of this capitalism movement. So, when we look at China's spending on internal security vs defense, is China's elite more afraid of America or of its own people?