Military Expenditure in the Asia-Pacific

Since the turn of the millennium, there has been a substantial increase in military spending in the Asia-Pacific. As the graph below illustrates, regional military expenditure doubled between 2000 and 2013—going from $199 billion to just over $400 billion. Of particular concern for many analysts, over two-thirds of this increase was driven by China, which went from spending $37 billion in 2000 to $171 billion in 2013, making it the world's second largest military spender after the United States.

While this rapid increase certainly sounds alarming, focusing on the changes in China's overall expenditure hardly tells the whole story. As the next graph suggests, China's rapidly rising military expenditure is more a function of China's rapid economic growth than a sign of an increased focused on militarization. Indeed, the portion of GDP that China has dedicated to its military has been relatively consistent since 2000—gently fluctuating between 1.9 and 2.2 per cent of GDP. Viewed in this context, the rapid increase in China's overall expenditure is less threatening than it might first appear (though it still has profound implications for the regional power structure).

How has the rest of Asia responded to China's growing regional dominance? Most Asian states actually dedicated a smaller portion of their GDPs to military spending in 2013 than they did in 2000. As the above chart reflects, average military expenditure in the region dropped from 2.2 to 2.0 per cent of GDP during this period. The relative lack of response to China's military expenditure suggests that most Asian states continue to have confidence in the United States' will and ability to guarantee regional peace and stability.

This finding runs contrary to some of the rhetoric coming from within the United States and from across the region, which has questioned the United States' commitment to the Asia-Pacific. Actions, however, speak louder than words. If states in the region were actually concerned about America's commitment to the Asia-Pacific, it seems unlikely that their defence expenditure would be declining.

Note: Data for both of these charts was drawn from the excellent military expenditure database maintained by the Stockholm International Peace Research Institute (SIPRI). All figures are expressed in constant (2011) $US. The nations that make up the Asia-Pacific are as follows: Afghanistan, Australia, Bangladesh, Brunei, China, Fiji, India, Indonesia, Japan, Kazakhstan, Laos, Malaysia, Mongolia, Myanmar, Nepal, New Zealand, Pakistan, Papua New Guinea, the Philippines, Singapore, Sri Lanka, Taiwan, Tajikistan, Thailand, Timor Leste, Turkmenistan, Uzbekistan, and Vietnam. For more info on how SIPRI puts together its estimate for China's annual defence expenditure, see here.