No line item in the mainland's annual budget gets more attention than national defence.
Every percentage point increase in spending heightens fears from Washington to Taipei, while at the same time bringing China closer to its goal of being a world power. But the exact amount that goes to arm the People's Liberation Army remains a closely guarded secret and the subject of intense speculation as the world tries to gauge China's military strength.
The official budget is 247.7 billion yuan - an increase of almost 13 per cent over last year. This accounts for about 1.6 per cent of gross domestic product, far less than the US$430 billion spent by the US last year - 3.9 per cent of that nation's GDP.
Mainland officials also like to point out that although spending on defence has increased four-fold in the past decade, it has not kept pace with the rate of growth in the economy. During the mid-1980s, China spent a much higher proportion of its GDP on defence - about 5 per cent according to government figures.
Beijing says the mainland's military expenditure in 2003 was equivalent to 57 per cent of Japan's, 76 per cent of France's, and 5.7 per cent of the US.
These arguments are dismissed by defence analysts, who say the opaque political system and the PLA's obfuscation have masked a budget up to three times bigger than officially stated. They say big-ticket items such as arms purchases and research are off the books.
