In the past three decades of reform and opening up, China has insisted that defense development should be both subordinated to and in the service of the country&rsquos overall economic development, and that the former should be coordinated with the latter. As a result, defense expenditure has always been kept at a reasonable and appropriate level

China&rsquos GDP was RMB 21,192.3 billion in 2006 and RMB 25,730.6 billion in 2007. The state financial expenditure was RMB 4,042.273 billion in 2006 and RMB 4,978.135 billion in 2007, up 19.1 percent and 23.2 percent respectively over the previous year. China&rsquos defense expenditure was RMB 297.938 billion in 2006 and RMB 355.491 billion in 2007, up 20.4 percent and 19.3 percent respectively over the previous year. The shares of China&rsquos annual defense expenditure in its GDP and in the state financial expenditure in 2006 were roughly the same as those in 2007, being 1.41 percent and 7.37 percent in 2006 and 1.38 percent and 7.14 percent in 2007. China&rsquos defense expenditure mainly comprises expenses for personnel, training and maintenance, and equipment. Expenses for personnel and training and maintenance account for two thirds of the defense expenditure. In 2007, the defense expenditure was used to cover the expenses of the active force (RMB 343.439 billion), the reserve force (RMB 3.693 billion) and the militia (RMB 8.359 billion). China&rsquos defense budget for 2008 is RMB 417.769 billion.
Both the total amount and per-service-person share of China&rsquos defense expenditure remain lower than those of some major powers. In 2007 China&rsquos defense expenditure equaled 7.51 percent of that of the United States, 62.43 percent of that of the United Kingdom. China&rsquos defense expenses per service person amounted to 4.49 percent of that of the United States, 11.3 percent of that of Japan, 5.31 percent of that of the United Kingdom, 15.76 percent of that of France and 14.33 percent of that of Germany. As for the share of defense expenditure in GDP, that of China was merely 1.38percent, while that of the United States was 4.5 percent, that of the United Kingdom 2.7 percent, and that of France 1.92 percent.

The Weekly Mirror Special issue on the occasion of 60th anniversary of founding of People's Republic of China