China’s defense spending is growing more slowly. But that doesn’t mean military tensions are easing


China announced Tuesday that military spending will grow at a slower pace than last year, but one analyst cautioned that it should not be interpreted to mean that military tensions with the United States will ease.

At its annual parliamentary meeting, the National People’s Congress, Beijing set its 2019 defense spending at 7.5 percent higher than a year ago — or 1.19 trillion yuan ($177.61 billion).

That’s lower than the 8.1 percent growth in 2018 and far below double-digit increases of previous years — though analysts have long questioned how accurately the budget reflects actual spending.

Military tensions between the U.S. and China have been on the rise in recent years as Beijing takes a more assertive stance on territorial claims in the South China Sea and East China Sea, as well as over Taiwan — a self-ruled territory which Beijing claims as its own.

But slower growth in defense spending doesn’t mean tensions with Washington have ceased, warned Timothy Heath, senior international defense researcher at U.S. think tank Rand Corporation.

In fact, the stated amount is less important than what it’s used for, Heath told CNBC’s “Squawk Box” on Tuesday.

Claims over South China Sea
China’s military budget is closely watched for hints on its strategic intent in the region and beyond.

“We will implement the military strategy for the new era, strengthen military training under combat conditions, and firmly protect China’s sovereignty, security and development interests,” Premier Li Keqiang told parliament Tuesday.

The build-up of China’s military capabilities has long rattled its neighbors. To counter Beijing’s rising military might in the region, Washington has tens of thousands of troops stationed in its military bases in Japan and South Korea.

The U.S. Navy has also sailed war ships through the Taiwan Strait, and near fortified Chinese-controlled islands and reefs in the South China Sea — in a bid to show support for the right of freedom of navigation in international waters. China strongly criticizes those operations.