Military Expenditure In China’s Peaceful Development

Military expenditure always plays an essential role in the rise and fall of great powers. It is the key issue for the governers of all ages. With the high level of civilization, the human must explore the way of peaceful development to avoid sacrifice. China has been taking the road of peaceful development, actively promoting and maintaining the peace of human society development. Military expenditure in the peaceful development is with great importance to the realization of China dream, the contradiction of the “China Threat” and the reinforcement of the national defense and the army.The analysis tools of this paper include conflict economics, game theory and econometrics. We mainly discussed the following three topics:(1) the misunderstanding of China’s development;(2) the requirements of military expenditure from the peaceful development;(3) the spillover effect of military expenditure to China’s peaceful development.The main content is listed as follows.The misunderstanding of China’s development and the China’s peaceful development strategy were discussed. There are different opinions on China’s development, such as “China Threat”. We classified the different points from three aspects realism, liberalism and constructivism. Finally, we contradicted the opinion of the “China threat” based on the data of military expenditure and diplomatic intercourse and stressed the fact of China’s peaceful development.The relationship of peaceful development, military power construction and military expenditure was discussed. In the beginning, we reviewed the historical change of military expenditure of the main powers in the human history. The expanding national interests of China demand a more powerful military system. As the development of the weapon system, more and more resources are needed to build a high level of military power. Defense as public goods can only handle money from the fiscal expenditure.The military expenditure and the rise and fall of great concerns was explained in a unify theory framework. In the view of conflict economics, a nation’s military expenditure can be seen as the fighting commitment of distributive effort in the global economy while other is the productive effort. The development of global economy needs the productive efforts from almost every nation, and the distribution of the aggregate output is determined in large degree by the fighting commitment of each nation. The numerical simulation of the model gives a reasonable explanation of the patterns of the divergence/convergence of prosperity-poverty gap between nations, the fact which is evidenced by many empirical analyses. The study gives a new perspective to explain the increasingly military expenditure and the development of great powers.The scale and structure of the military expenditure in the peaceful development were studied. China’s military expenditure is not yet to the average value of the world, which is not match to the rising international status and expending national interests. China needs to increase the scale of the military expenditure to meet the requirement of the peaceful development.(1) There is a high rate in cost growth between generations of defense platforms, which is the reference for China’s weapon fee.(2) The improvement of military human capital has different rules in different periods. Born out of the planned economy era military system especially the personnel fee decision must adapt to the development of the whole social economic system. We must make the military expenditure budget based on the market economy rules and the essential attribute of military combat team to inspire enthusiasm of military personnel.(3) Military training is the basic approach to the generation of combat effectiveness. In peace time, military training is a basic way to implement a new operational concept, to become familiar with new weapons and new war environment. For now, China’s army is still at the primary stage of the informatization of the military training. We must strengthen military training in the guidance of new combat concept. Military spending must adapt to the rules of military informatization training. China must optimize the structure of military spending to meet the requirement of the peaceful development. We need to input more resources to navy and air force. Also the expenses for personnel, training and maintenance, and equipment with each accounting for roughly one third of the total should be increased together.The military spending’s boosting role to the peaceful development of China was discussed. We analyzed the external effect and the scale effect of China’s military expenditure using the structure form of econometrics and found that there is positive effect. Then, we analyzed the welfare effect using the reduced form of econometrics and found that defense expenditure did not cause the income inequality for the case of China. What’s more, military expenditure can improve income inequality through the redistribution channel, the personnel expenditure channel, the army industry channel, the household register channel, the R&D channel and the regional economy channel.Finally, some suggestions for military spending in China’s peaceful development were put forward.(1) China’s military expenditure should fill the gap from the periods of patience, increase to the average level of the world, and cover the demand from the new revolution of military affairs. The expenses for personnel, training and maintenance, and equipment should be increased together and the navy and air force should be enhanced. Resources should be allocated to the grassroots.(2) The growth institution should be built to meet the cost growth of expenses for personnel, training and maintenance, and equipment.(3) Military expenditure should be evolution with the reform of fiscal system and defense industry base.(4) The civil military integration should be deepened to strengthen the economy effect of military expenditure.The main innovations:1. We contradicted the “China threat theory” from the angle of policy elasticity. There are different opinions on China’s development, in which the “China threat theory” is the most ridiculous. We studied the policy elasticity based on the data of military expenditure and diplomacy of the main nations and found that there was no evidence on the “China threat theory”, which disproved the “China threat” from the data view.2. We studied the role of military expenditure in the rise and fall of great powers from the view of conflict economics. As the credibility of the fighting commitment of countries military expenditure plays a vital role in the interest allocation of the global economy and the shaping of the global order.3. In the view of comparative advantage of nations, we discussed the main direction of the expending national interests and the military spending demand to protect the national interests. In our opinion, the Africa would be one of the main areas with highly correlation to China’s investment, resource input and goods export. We must develop our military power to secure the sea route and investment overseas.4. The cost growth of weapon systems was discussed based on the weapon cost data. There is overall cost escalation for military weapons which has exceeded the Consumer Price Index and the Gross Domestic Product deflator. Specifically, the aircraft and the navy ships has a highly cost growth rate than that of the main tanks, which is of great reference for the expose of weapon procurement of China.5. The economy effect of military expenditure was discussed. There is growth effect and welfare effects of China’s military expenditure in the past decade. We discussed the economy mechanism of growth effect from the factor productivity and economies of scale. Also, we discussed the economy mechanism of welfare effects from the Third-line construction of defense industry, externality, population mobility, social stratification and so on.