China is striving to narrow the gap between its military and the world's leading militaries, and make up the deficiencies in the military's capabilities in modern warfare. Defense expenditure is growing steadily and the breakdown of spending is being continuously optimized.
In terms of usage, China's defense expenditure is assigned to three sectors – personnel, training and sustainment, and equipment. Personnel expenses mainly cover the salaries, allowances, food, bedding, clothing, insurance, subsidies and pensions for officers, non-ranking officers, soldiers and contracted civilians, as well as retirees supported from the defense budget. Training and sustainment expenses mainly cover training of the troops, institutional education, construction and maintenance of installations and facilities, and other expenditure on routine consumables. Equipment expenses mainly cover R&D, testing, procurement, repairs, maintenance, transport and the storage of weaponry and equipment. In terms of scope, defense expenditure covers all active forces, reserve forces and militia.
Since 2012, the increase in defense expenditure has been primarily spent for the following purposes:
1. Adapting to national economic and social development, improving the wellbeing of service personnel, ensuring regular increases in military salaries, and bettering the working, training and living conditions of the troops;
2. Increasing input in weaponry and equipment development, phasing out the outdated, upgrading the old, and developing and procuring the new, such as aircraft carriers, fighters, missiles and main battle tanks, to steadily modernize weaponry and equipment;
3. Deepening national defense and military reform, supporting major reforms in military leadership and command systems, force structure and composition, and policies and institutions;
4. Supporting training in real combat conditions, enhancing strategic-level training, joint training at TCs' level and training of services and arms, and improving the conditions for simulated, networked and force-on-force training; and
5. Supporting diverse military tasks including the UNPKOs, vessel protection operations, humanitarian assistance operations and disaster relief efforts.
From 2012 to 2017, China's defense expenditure increased from RMB669.192 billion to RMB1,043.237 billion. China's GDP and government expenditure grew at average rates of 9.04% and 10.43% respectively, calculated on the price of the indicated years, while its defense expenditure increased by an average of 9.42%. Defense expenditure accounted for 1.28% of GDP and 5.26% of government expenditure on average. The percentage of China's defense expenditure in GDP
