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Measuring hard power: China’s economic growth and military capacity

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  • Peter E. Robertson
  • Adrian Sin

Abstract

China’s rapid economic growth is facilitating massive increases in its military spending and causing increased security concerns in Asia and the Western Pacific. But there is uncertainty over how large China’s military spending is relative to other countries, or how fast it is growing in real terms. We address this issue by deriving a relative military cost price index based on the relative unit costs of inputs. We find that China’s real military spending is much larger than suggested by exchange rate comparisons, and even larger than standard purchasing power parity comparisons. We also find, however, that the real growth of China’s military spending has been smaller than conventionally thought. This is due to rapidly growing wages in China and the large share of personnel in China’s military budget.

Suggested Citation

  • Peter E. Robertson & Adrian Sin, 2017. "Measuring hard power: China’s economic growth and military capacity," Defence and Peace Economics, Taylor & Francis Journals, vol. 28(1), pages 91-111, January.
  • Handle: RePEc:taf:defpea:v:28:y:2017:i:1:p:91-111
    DOI: 10.1080/10242694.2015.1033895
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    Cited by:

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    2. Khalid Zaman, 2019. "Does higher military spending affect business regulatory and growth specific measures? Evidence from the group of seven (G-7) countries," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(1), pages 323-348, April.
    3. Yingying Xu & Hsu Ling Chang & Chi Wei Su & Adelina Dumitrescu, 2018. "Guns for Butter? Empirical Evidence from China," Defence and Peace Economics, Taylor & Francis Journals, vol. 29(7), pages 809-820, November.
    4. Robert Grosse & Jonas Gamso & Roy C. Nelson, 2021. "China’s Rise, World Order, and the Implications for International Business," Management International Review, Springer, vol. 61(1), pages 1-26, March.

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