- The Washington Times - Tuesday, March 7, 2000

BEIJING China announced a 12.7 percent increase in military spending yesterday at least the eighth straight double-digit jump as the army tried to influence rival Taiwan's presidential election and again threatened war.

The $14.5 billion defense budget, presented by the finance minister to the legislature, continues higher spending begun in the early 1990s to modernize the 2.5 million-member military. Among its top missions: preparing to attack if Taiwan moves toward outright independence.

[However, China's defense budget remains small compared to the United States' defense budget of $293 billion for fiscal 2000. The United States' current level of military spending represents a $1 billion increase over fiscal 1999.] Although the People's Liberation Army is at least several years from posing a formidable threat, commanders have used the run-up to Taiwan's March 18 presidential election to warn against rising separatism. The warnings are partly due to real fears and partly aimed at getting more government money, Chinese and foreign analysts said.

Last month, the navy sailed its newest acquisition a Russian-built destroyer armed with nuclear-capable missiles through the Taiwan Strait, which divides the mainland and Taiwan. Yesterday, Defense Minister Chi Haotian said the government was on "a high state of alert" for separatist actions on Taiwan.

"The Chinese People's Liberation Army is strengthening its combat readiness to, at any time and under any conditions, carry out the sacred mission of defending the unity of the motherland," Mr. Chi told military delegates to the legislature, according to remarks carried by the official Xinhua News Agency.

China and Taiwan split after Mao Tse-tung's communists drove Chiang Kai-shek's nationalists from the mainland in 1949. China considers Taiwan a renegade province and has vowed to retake the island by force if necessary.

Chinese leaders have grown anxious over perceived Taiwanese moves away from unification and toward formal independence. None of the three leading presidential candidates accept unification on Beijing's terms. One of them, Chen Shui-bian, represents the Democratic Progressive Party, which has long advocated independence.

Yesterday, Mr. Chi repeated a new threat that became formal Chinese policy last month that China might attack if Taiwan indefinitely delayed negotiating unification. And in a sign of the Chinese military's increasing unease at the prospects of a Chen victory, Mr. Chi warned Taiwanese separatists that they were "playing with fire."

"Choosing 'Taiwan independence' means choosing war," Mr. Chi said.

The military's newspaper also chimed in. Without naming Mr. Chen, the Liberation Army Daily accused "the leader of the group that has always advocated Taiwan independence" of deceiving the Taiwanese electorate. Mr. Chen said last month there was no need for a declaration of independence unless China attacked.

Despite the rhetoric, China will need years to improve its navy and air force if it wants to blockade, much less invade, Taiwan.

Military spending accounted for 13 percent of the $111.1 billion national budget Finance Minister Xiang Huaicheng presented to the National People's Congress.

In most countries, governments give legislatures reams of information to support spending requests, but Mr. Xiang presented only a 26-page outline and some of that covered last year's spending. Dominated by the Communist Party, the congress is largely powerless, approving decisions made by Chinese leaders.

Mr. Xiang told the nearly 3,000 delegates that the military spending increase will mainly cover pay raises for troops and expenditures on garrisoning Macao, the territory that Portugal handed back to China in December. He provided no other details.

Foreign analysts believe actual defense spending may be two or three times higher than the public figure and that weapons research and foreign purchases are not included. China is spending more than $1 billion annually to buy foreign particularly Russian weapons, and that sum may triple over the next five years.

In delivering the budget, Mr. Xiang said the government would continue its third year of deficit spending to fund public works and shore up economic growth.

Mr. Xiang said overall central government spending would increase by 12.3 percent, with a projected record deficit of $27.7 billion. That shortfall would be up from $21.7 billion in 1999.

Part of that increase, Mr. Xiang said, is due to a change in accounting. Interest payments on debt were included for the first time this year.

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