Chinese finance minister outlines military spending increase

Delegates applaud as Chinese Premier Zhu Rongji speaks to the National People's Congress

March 6, 2000
Web posted at: 4:59 p.m. HKT (0859 GMT)

In this story: Funding hike comes amid tension Zhu echoes Jiang on Taiwan RELATED STORIES, SITES

BEIJING -- Chinese Finance Minister Xiang Huaicheng announced Monday a 12.7 percent increase in military spending for 2000 and reiterated the government's anti-corruption stance while presenting the budget to the national legislature.

The increased military funding will outstrip China's anticipated 7 percent economic growth, and will contribute to the nation's 229.9 billion yuan ($27.7 billion) deficit, Xiang told delegates to the National People's Congress. The 11-day legislature session opened Sunday.

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Xiang said the budget would allocate 120.5 billion yuan ($14.5 billion) for defense, primarily for salaries and allowance increases for troops and expenditures for the garrison in Macau.

Central government spending overall will increase 12.3 percent to 920.3 billion yuan ($111.1 billion), and revenues will increase 7.9 percent to 690.4 billion yuan ($83.3 billion), leaving a 229.9 billion yuan ($27.7 billion) deficit, up from the 179.7 billion yuan ($21.7 billion) shortfall in 1999, Xiang said.

Funding hike comes amid tension

The spending hike for the People's Liberation Army, the world's largest military, comes amid renewed tensions over Taiwan, and matches the 12.7 funding increase in last year's budget. China lavished double-digit spending increases on the PLA for much of the 1990s.

China rattled Taiwan, scheduled to hold presidential elections on March 18, with a government policy paper last month, in which Beijing threatened to invade the island if it dragged its feet indefinitely on reunification talks.

On Sunday, Chinese Premier Zhu Rongji declared war on corruption and pledged to the NPC delegates to take action against crooked government officials. He also refused to soften China's tough stance on Taiwan.

Xiang, expanding on the government's anti-corruption theme, railed against wasteful spending, saying money that China can ill-afford is being lavished on increasingly opulent hotels, office buildings and auditoriums and on "high consumption."

"Some local governments even cannot guarantee funds for performing their normal functions, but such phenomena as ostentatious and extravagant behaviors and pleasure-seeking are still prevalent in some localities and departments," Xiang said.

"Budgetary funds are seriously lost and wasted É This has aroused strong resentment among the people," Xiang added.

Zhu said during the session's opening that no one would be spared in the fight against corruption. China, he added, "must take more effective measures and make unremitting efforts to fight corruption and build a clean and honest government."

Zhu echoes Jiang on Taiwan

However, Zhu sounded less like a reformer when commenting on Taiwan -- he echoed the tough stance taken on Saturday by Chinese President Jiang Zemin.

Zhu said China would not "sit idly by and watch any serious separatist activity aimed at undermining China's sovereignty and territorial integrity." On Saturday, Jiang threatened "drastic measures" if Taiwan delayed talks on reunification.

Jiang reviled Taiwanese backing independence as "devils," and said their supporters abroad were doomed to disappointment. Taiwan is preparing to elect a president on March 18.

None of the three leading candidates have indicated they would deviate from outgoing President Lee Teng-hui's position regarding China. Lee has insisted that Taiwan would negotiate with China only as a sovereign equal.

Beijing Bureau Chief Rebecca MacKinnon and The Associated Press contributed to this report.

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China ministry of foreign trade & economic cooperation
China Economic Information Network
Chinese Embassy in Washington DC

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