China's secret defense budget

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BOB MOON: China wants a new dialogue with Washington on trade disputes between the two countries. A spokesman for the foreign ministry in Beijing says both sides need to "take the principle of mutual respect to enhance communication," rather than adding pressure to solve the problems.

On the other hand, pressure is just what the Chinese will be getting in Washington today. A congressional hearing is going to examine the steady rise of China's defense budget. Some experts are accusing China of an aggressive military build-up that's leading to instability in the entire region. Beijing, however, insists that its military policy is defensive in nature. Ruth Kirchner has more from the Chinese capital.


RUTH KIRCHNER: Officially, China's military budget is going to rise by almost 18 percent this year to $45 billion U.S. dollars.

But Robert Karniol of Jane's Defense Weekly says the actual numbers could be twice as high. Nobody knows for sure.

ROBERT KARNIOL: The Chinese lack transparency in what they are doing and why they are doing it, what kind of schedule they are working on.

Karniol says despite the secrecy, it's clear that China has been working for years on modernizing its outdated equipment.

KARNIOL: The secret defense budget is generally thought to go to areas like purchase of military equipment, that is ships and submarines and airplanes and things like that, to military rsearch and development programs, that kind of heavyweight stuff.

He thinks Beijing's ultimate goal is to be the dominant power in East Asia, but China still lags years if not decades behind the U.S. in military technology.

In Beijing, I am Ruth Kirchner for Marketplace.

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