Checkpoint Asia

Combined Russia and China Spend 80 Percent as Much on Their Militaries as the US

The US military lead over the two should they combine is immensely overblown

Of course you have seen many times those graphs saying that the US spends on the military as much as the next seventeen/fourteen/eleven/nine (the number changes all the time) countries combined. None of that is true.

Those statements are based on officially declared budgets converted to dollars at exchange rates which doesn’t make any sense. It’s fine for countries like the UK and France where prices ares similar to those in the US but breaks down for nations like Russia and China whose militaries can fund their personnel and procure equipment at far lower sums in dollar terms.

For example in late 2014 when the value of the ruble on the exchanges was halved the Russian military budget expressed in dollars was likewise halved to where it was only slightly higher than that of the UK. Yet it would be patently absurd to claim that the actual financing of the Russian military was now only half as much. The ruble still bought as much as ever inside Russia and its military has 900,000 men under arms with a world-class nuclear force, compared to 200,000 in the UK.

In reality as the military commentator Micheal Kofman calculated the Russian military spending ($66 billion nominal) adjusted for Purchasing Power Parity is between $150 billion and $200 billion “with a much higher percentage dedicated to procurement, research and development than Western defense budgets”. We’ll be conservative and put the number at $160 billion equivalent.

China’s officially declared defense budget for 2019 is $175 billion. However it is generally believed that China’s actual military spending is higher, estimates range from over $200 billion (DoD) to as much as $250 billion (SIPRI – Stockholm International Peace Research Institute). However this is just the spending at exchange rates not accounting for the fact that a yuan in China goes much farther than would an exchange-rate equivalent amount of dollars in the US.

China’s nominal GDP is estimated at $14.2 trillion, but its PPP-adjusted GDP is estimated at $27.3 trillion. That is 90 percent more. So in fact adjusted for PPP China’s military spending is worth between $380 billion to $475 billion. We’ll be conservative and put the number at $400 billion.

Combined then Russia and China spend between the equivalent of $530 billion and $675 billion, being conservative we’re estimating $560 billion.

In 2019 the base Pentagon budget was $689 billion and for 2020 the Pentagon is asking for $718 billion but Trump wants to grant it $738 billion.

The total cost of the US national security state in 2020 has been estimated at $1.25 trillion, however that includes expenses which aren’t tied to warfighting ability directly, such as interest payments on defense share of national debt, intelligence agencies, foreign aid and Veterans Affairs.

Tallying up just core military-related spending by the DoD and the Department of Energy (on nukes) will be $750 billion in 2020.

However if past years are a guide China’s spending will likewise be at least some 7 percent higher than in 2020, so we’re looking at PPP-adjusted Chinese spending of $430 billion and that’s again on the conservative side.

Thus in 2020 to the US’ $750 billion, Russia and China combined will spend probably at least the equivalent of $590 billion, or nearly 80 percent as much, with a bigger proportion of that spent on arms procurement.

Sky-high military budgets are a new thing for China

That does not mean that Russia and China combined have 80 percent of the military might the US does. Past spending matters as well. The US has been investing in its military heavily for decades, but China is a relative newcomer.

Nonetheless America’s military lead over China and Russia should they combine, is greatly overblown. Moreover the gap is shrinking.