This year, China has had the lowest increase in its defense budget, 7.5 percent, in two decades. Throughout that period, the budget tended to increase ten percent or more each year. The slowdown is linked to the international economic recession, and ongoing reforms in the military.
The new budget is $78 billion. Although puny compared to the $600 billion American budget, China gets more for its money. Moreover, many defense expenses are not part of the defense budget, but taken from other parts of the government. Wages, living costs and equipment are also much cheaper. So, in American terms, the $78 billion is closer to half the American budget. China has about 2.2 million troops on active duty, compared to about 1.4 million for the United States.