China’s stimulus and the military

There could be an interesting dynamic here. On the one hand, with government spending going up in all departments, I doubt the military will be left out. So look for another near or above 20% boost in military spending in the next budget.

At the same time, one surprising element of the recent White Paper is how enmeshed the military still is in the economy. In particular, how it gets involved in infrastructure construction: “In the past two years they have put over 14 million workdays and one million vehicles (or machines)/time into [national construction]”.

Now, the point about a stimulus is that you want to spend money. So using free military labour is not very desirable, and you’d expect the local govts to avoid using them. Which means a whole bunch more free time for military personnel. Either the stimulus gets slightly diluted – but onl slightly, you’re still buying all the materials – or the PLA has to find a whole bunch of new training modules, double quick.

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