The United States currently leads the world in terms of defense spending. In 2019, the United States’ military expenditures totaled around $649 billion. The next largest spender is China, whose 2019 military expenditures approximated $261 billion. It may appear as though the United States significantly outspends China, but when factors such as personnel costs and purchasing power parity (PPP) are taken into account, the gap between the US and China appears to shrink.
In 2018, Army Chief of Staff Mark Milley argued in front of the Senate Defense Appropriations Committee that the Chinese defense spending is more concerning than the difference in USD would lead us to believe. One of the pillars of his argument was that the United States’ military personnel are the best paid in the world. The average annual salary of US military personnel is around $62,000. This amount would cover the salaries of two or more PRC soldiers. This difference, coupled with fact that much of the military equipment and technology the PRC purchases comes from government-owned or heavily subsidized manufacturers, means that the Chinese defense budget needs to be recalculated to reflect its true value. One 2019 estimate placed Chinese defense spending equivalent to $455 billion after taking into account PPP.
With the true value of Chinese defense spending inching closer to that of the United States’ each year, the United States needs to begin preparing for a time when a change in spending habits is necessary to maintain its position as top global defense spender. Currently, China’s People’s Liberation Army’s Navy (PLAN) is projected to have over 425 battle force ships by 2030. While it can be argued that the United States has a better trained, more experienced naval fleet, greater numbers provide China with an advantage that cannot be ignored. A change in US defense spending will be required to match Chinese naval growth. It is wiser to make those changes now, before conflict forces the US to find out just how much superior training and experience offsets sheer numbers.