China Defence and Security Report 2015
BMI View: China has continued its assertion of dominance in the South China Sea over several incidents inthe past year. This has raised tensions with its Asian neighbours as well as the United States. AlthoughChina has begun to make political moves, deals and visits to ease these tensions, many speculate that theseare more for show rather than sincere negotiations. China has a growing defence sector and is becomingincreasingly self-sufficient with regards to defence procurements, however the domestic sector is statedominatedand offers little opportunity to new entrants, especially foreign groups.
Like many aspects of its defence posture, China keeps its annual defence budget secret, nevertheless, it ispossible to make an accurate estimate regarding what the country spends annually on defence. China is oneof the world's largest spenders on defence but the US claims that China still has the disadvantage in terms ofsize and quality of equipment. The growth of China's defence budget has been a recurring one for quitesome time. The defence industry in China has benefitted from this continued investment and as a result hasincreased its technological capabilities. This is unlikely to change as the issues surrounding the sovereigntyof islands in the South China Sea continue to be the predominant driver for spending at this time.
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