China vs US budget

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weasel1962

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Unread post22 Jan 2020, 09:44

There have been a number of recent calls to compare China's military budget to US's military budget on a PPP (difference in country cost) basis, taking into account personnel costs.

The attached is my take on the issue (2012-2019). The breakdown of China's budget is based on the China government's single submission to the UN Milex in 2017 for which I have extrapolated for the remaining years. The calculation of the PPP is by the world bank and I find no need to recalculate for this exercise.

It is interesting to note that on a PPP basis, the personnel costs is not significantly different for both US & China (i.e. US personnel gets paid at the PPP rate over what the Chinese does). What is stark is more that the bulk of the US's military budget is spent on operations. This is logical as US has global operations whereas China is generally localised (and hence cheaper). It should also be noted that the sum of columns p to r does not equal column o, with the difference being military construction and R&D. Again, the Chinese information does not track R&D costs separately.

More worrying for the US is that the equipment procurement appears to be similar on a PPP basis (see column l vs column r). This means that China is buying roughly the same amount (at a cost equivalent to the PPP rate) as the US (of course this does not mean the plane that the Chinese buys is technologically similar to the plane the US buys).
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weasel1962

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Unread post22 Jan 2020, 09:53

As a simple illustration of the above, in 2019 China would have spent ~US$75.17 billion dollars on equipment. The US would need to pay US$145.83 billion for the same equipment if bought in the US (due to the difference in costs between the 2 countries). In 2019, the US defense budget for equipment procurement was US$148.96 billion.

It looks like the procurement difference was more stark before 2012 so China's procurement has caught up in the last decade.
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sferrin

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Unread post22 Jan 2020, 20:18

Re procurement, I'm pretty sure Chinese workers aren't being paid as much as US workers. Same with Chinese military personnel vs US.
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weasel1962

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Unread post23 Jan 2020, 02:34

Agreed. Per numbers, 2019 PLA personnel budget was ~$56.33 billion, compared to US' $150.73 billion. Roughly 2.3 million PLA personnel vs US personnel of 1.3 million active duty means roughly US soldiers are paid ~4.7 times (150.73/1.3 / 56.33/2.3m).

However as a proportion of budget, China personnel cost is ~30.8% of total military expenditure vs 22% for US reflecting the higher operations costs that the US incurs.

China's FY 2017 numbers
https://www.un.org/disarmament/wp-conte ... -China.pdf

On US numbers, I have based on budget which may be different from actual outlay. Looking at US milex (which I have not compared yet), part of the US operations budget may also comprise salaries. Per Milex 2015, US salaries would comprise 35% of budget.
https://www.un.org/disarmament/wp-conte ... -final.pdf

The key message is mainly that US defense procurement budget is not materially more than Chinese defense procurement budget after taking into account cost differences in the 2 countries, and deducting operations/personnel costs.
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milosh

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Unread post31 May 2020, 08:33

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Corsair1963

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Unread post01 Jun 2020, 01:04

:roll:
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ford2go

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Unread post01 Jun 2020, 05:37

This assumes that everybody is telling the truth. The CIA used to do something called The World Fact Book that discussed many stats for many countries. Not saying that they were always right, but they did present a lot of data.

One of the things that I do remember is that they noted that the Chinese military budget as reported was not all that accurate. There were apparently many costs that were reported elsewhere-- or possibly not at all. Their conclusion was that it was hard to tell just what they were spending.

Don't know if that's true, but I thought that I would mention it.

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milosh

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Unread post01 Jun 2020, 15:38

You have that in binkov video. He stated Pentagon estimate which is 1.15 to 1.7 higher real budget then what official Chinese number.

So that is something between 200 to 300 billions dollars.

40% of that is going on new equipment so they spend 80 to ~120 billions on new equipment, last number is quite close to US spending on new equipment.
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weasel1962

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Unread post14 Sep 2020, 04:25

Detailed analysis from the CBO on budgets over next 5 years. Basically, the message is the budget's going to increase (by the amount of inflation) or flat discounting inflation for the next 5 years. Not as bad as some think.
https://www.cbo.gov/system/files/2020-09/56526-FYDP.pdf

Tidbits include $80+b in O&S comprises civilian staff costs so staff costs per column P in my earlier table is solely military staff costs and another $3Xb for tricare&MHS (table 3 of the report). Acquisition costs will be ~$242b which comprises $137b procurement costs (reflected as column r of my earlier table) with remaining $107b being RDT&E. Breakdown by service is in figure 5 of the report.

Weasel's note: If China maintains its budget trajectory, its equipment procurement will continue to expand the gap with the US in PPP terms.
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Corsair1963

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Unread post14 Sep 2020, 04:41

weasel1962 wrote:Detailed analysis from the CBO on budgets over next 5 years. Basically, the message is the budget's going to increase (by the amount of inflation) or flat discounting inflation for the next 5 years. Not as bad as some think.
https://www.cbo.gov/system/files/2020-09/56526-FYDP.pdf

Tidbits include $80+b in O&S comprises civilian staff costs so staff costs per column P in my earlier table is solely military staff costs and another $3Xb for tricare&MHS (table 3 of the report). Acquisition costs will be ~$242b which comprises $137b procurement costs (reflected as column r of my earlier table) with remaining $107b being RDT&E. Breakdown by service is in figure 5 of the report.

Weasel's note: If China maintains its budget trajectory, its equipment procurement will continue to expand the gap with the US in PPP terms.



The CBO is rarely right about their projections.....
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weasel1962

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Unread post23 Feb 2021, 06:23

Despite all the talk, looks like US defense budgets are still projected by CBO to see a gradual increase.

https://www.cbo.gov/system/files/2021-0 ... utlook.pdf
US defense budget projection.jpg


A bit of talk going around that Biden's 1st budget might actually see an upside. Will wait for the budget (anticipate Apr/May) to confirm.
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Corsair1963

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Unread post24 Feb 2021, 07:44

weasel1962 wrote:Despite all the talk, looks like US defense budgets are still projected by CBO to see a gradual increase.

https://www.cbo.gov/system/files/2021-0 ... utlook.pdf
US defense budget projection.jpg


A bit of talk going around that Biden's 1st budget might actually see an upside. Will wait for the budget (anticipate Apr/May) to confirm.



Very doubtful.....If, we can just maintain a flat budget for the next couple of years. Then I would consider us to be lucky!
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Corsair1963

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Unread post24 Feb 2021, 07:51

Chairman Discusses Future Defense Budgets

Army Gen. Mark A. Milley is a realist, and he sees future defense budgets, at best, remaining flat or possibly going down significantly in the years ahead.

The chairman of the Joint Chiefs of Staff told the Brookings Institution's Michael O'Hanlon yesterday that COVID-19 has hit the nation hard, and that carries over to the budgeting process. The upheaval caused by the coronavirus pandemic must be countered and remedied before the United States can budget its military to prevail in great power competition.

Great power competition with China and Russia is the main factor in the strategic environment today.

You can read the entire article here........

https://www.defense.gov/Explore/News/Ar ... e-budgets/
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mmm

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Unread post25 Feb 2021, 23:25

Somehow I see BCA 2.0 coming, unfortunately there are a lot of parallels here if you want to draw it...

But then 2nd Cold War can get a lot colder a few years down the road, so much so that everyone starts to prepare for "War". DoD could also be a vehicle for some industrial policies like rare earth and semiconductor manufacturing.
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XanderCrews

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Unread post26 Feb 2021, 01:51

Corsair1963 wrote:
weasel1962 wrote:Despite all the talk, looks like US defense budgets are still projected by CBO to see a gradual increase.

https://www.cbo.gov/system/files/2021-0 ... utlook.pdf
US defense budget projection.jpg


A bit of talk going around that Biden's 1st budget might actually see an upside. Will wait for the budget (anticipate Apr/May) to confirm.



Very doubtful.....If, we can just maintain a flat budget for the next couple of years. Then I would consider us to be lucky!



I honestly I don't know why its doubtful. If you think of the American military and its various wars as completely logical things, then yes obviously covid will affect the budget. as the economy goes, so does the budget. This is logical, which is why it is most likely to be untrue.

however if you think of the US military budget and the various wars we engage in at great cost around the globe regardless of what the public thinks, and we are ok with losing and sacrificing capability to get them, and just keep throwing triillions at them anyway, then theres actually very little reason to think anything will change. in fact, there a real chance we get more war and more budget. We did a troop surge in Afghanistan while dealing with a financial meltdown and then threw in Libya, Syria, and a little Ukraine too, along with Yemen and a few others I'm forgetting just for kicks. We had the SECDEF resign because trying to leave just one of these little wars meant abandoning the precious Kurds. And you can't just do that. If the choice is between American power and the kurds, then the kurds win.

America is a little like those people on hoarders, and the people come to help them and the conversation goes something like this:

Can we get rid of Syria? no? ok well how about Yemen? oh we need Yemen too...ok can we maybe get out of Afghanistan then? Youve been holding onto this thing for 19 years, its starting to smell... ok ok we will hold onto that.. please don't resign!

ok so lets see what else... ok we need troops in 2 of every 3 nations? umm ok... what about just 50 percent of every nation on the planet? NO? ....


Ok Ok, how about we prematurely retire some assets Oh we need those too huh?

Wait where are you going after Iran now, we haven't even started cleaning up these other messes!


Now I could be wrong, I really could. A rational person would see that tough choices have to be made, but we are no longer rational and have not been for a long time. We have spent over 6 trillion on the GWOT (and counting, because again its not over). Money that could probably be better spent elsewhere, and regardless of votes or public sentiment or other needs, we have yet to extract ourselves from these nightmares, in fact we only add to them. When we do try and stop or even slow them down our generals throw a fit and then pretend to be "great realists" who are "in touch" with the American public, and most comically the constitution. even funnier when they tell us about the "great power competition" Trump tried to stop these stupid wasteful wars that only harm our future ability to fight and win against real actually dangersou foes, thus he pushed back against the military. Then Trump went away. Isn't that something? WE have a bevy of Generals and Admirals who rallied against him, who by absolutely no coincidence are actually personally involved in the endless wars, actively involved in the companies that support it, or both. They didn't help get him into power so that the get stiffed. Theyre gong to get ROI and they know it. Mcchrystal, Mattis, and plethora of others who work for defense contractors and actively worked against the last guy and for the new admin, are going to get what they want.

we are always in terrible straights, but never terrible enough to change them. Its like an alcoholic who realizes they drink too much, but not so much that we should give up drinking. We should just start paying for the booze on credit. Whew that was close! almost cut into my beer money with my whiskey needs!

why would they start being rational now?


US launches first airstrike under Biden against Iran-backed target in Syria
By Kenneth GargerFebruary 25, 2021 | 7:41pm | Updated


look at that! as if on cue!
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