Abstract
Data limitations arising from non‐transparency in military expenditure reporting impose significant constraints on economists studying country and comparative developments in this field. This article focuses on the case of China. It reviews the recent literature on China's military expenditure, examines the variance in published estimates, and identifies three factors which help explain the variance: budgetary falsification; non‐budgeted PLA revenue; and the US dollar purchasing‐power parity of the yuan. Conclusions emphasize important policy implications of such variance and suggest a more active role for defence economists in a field of research generating considerable attention from international relations scholars.
Notes
Digby Waller is Defence Economist at the International Institute for Strategic Studies (IISS). This article has its genesis as a paper delivered to a conference on Chinese Economic Reform: The Impact on Security Policy sponsored by IISS and the Chinese Council of Advanced Policy Studies in July 1994. Thanks are due in particular to Dr. Gerry Segal, Senior Fellow of IISS Asian Security Studies, for helpful discussions and comment. Errors of detail and interpretation are the responsibility of the author alone.