China vs US budget
Posted: 22 Jan 2020, 09:44
There have been a number of recent calls to compare China's military budget to US's military budget on a PPP (difference in country cost) basis, taking into account personnel costs.
The attached is my take on the issue (2012-2019). The breakdown of China's budget is based on the China government's single submission to the UN Milex in 2017 for which I have extrapolated for the remaining years. The calculation of the PPP is by the world bank and I find no need to recalculate for this exercise.
It is interesting to note that on a PPP basis, the personnel costs is not significantly different for both US & China (i.e. US personnel gets paid at the PPP rate over what the Chinese does). What is stark is more that the bulk of the US's military budget is spent on operations. This is logical as US has global operations whereas China is generally localised (and hence cheaper). It should also be noted that the sum of columns p to r does not equal column o, with the difference being military construction and R&D. Again, the Chinese information does not track R&D costs separately.
More worrying for the US is that the equipment procurement appears to be similar on a PPP basis (see column l vs column r). This means that China is buying roughly the same amount (at a cost equivalent to the PPP rate) as the US (of course this does not mean the plane that the Chinese buys is technologically similar to the plane the US buys).
The attached is my take on the issue (2012-2019). The breakdown of China's budget is based on the China government's single submission to the UN Milex in 2017 for which I have extrapolated for the remaining years. The calculation of the PPP is by the world bank and I find no need to recalculate for this exercise.
It is interesting to note that on a PPP basis, the personnel costs is not significantly different for both US & China (i.e. US personnel gets paid at the PPP rate over what the Chinese does). What is stark is more that the bulk of the US's military budget is spent on operations. This is logical as US has global operations whereas China is generally localised (and hence cheaper). It should also be noted that the sum of columns p to r does not equal column o, with the difference being military construction and R&D. Again, the Chinese information does not track R&D costs separately.
More worrying for the US is that the equipment procurement appears to be similar on a PPP basis (see column l vs column r). This means that China is buying roughly the same amount (at a cost equivalent to the PPP rate) as the US (of course this does not mean the plane that the Chinese buys is technologically similar to the plane the US buys).